Volkswagen approved a spending plan of €34 million equal to $40 billion that accelerates the efforts of the carmaker to become a leader globally in electric vehicles.
The largest carmaker in the world by unit sales has been approved to spend the money for electric cars, new mobility services and autonomous driving by the start of 2023, it announced following a supervisory board meeting.
With planning approved, VW said it was laying its foundation for making it the world’s top player by 2025 in electric mobility, said CEO Matthias Mueller.
The projected spending by the carmaker is substantially larger than its pledge in September that it was investing over €20 billion on electric and autonomous cares between now and 2030.
Electric as well as autonomous vehicles have been widely seen as keystones for future transportation, but pioneers like Tesla as well as other car manufacturers continue working on how to earning money on them, as poor infrastructure for charging, high costs for batteries, and the limited driving range for electric vehicles all weigh on the demand by customers.
Until two years ago when it admitted to cheating on diesel emissions tests, VW was slow at embracing the electric car and autonomous technology.
However, the emissions scandal, and new quotas in China for electric cars, has prompted a big shift strategically to zero-emissions and technology for self-driving, and the German car maker now has one of the industry’s most ambitious goals of the entire industry.
An electric version has been pledged by VW for every one of its 300 models by 2030
The carmaker said that the total investment in projects and capacity for electric vehicles would reach over €72 billion by 2022.
To fund more spending on its electric vehicles, VW will draw on its cost savings in each area of operations, which includes vehicle development, manufacturing and administration, as well as it strong reserves of cash.
Net liquidity remains good at €24 billion after the first nine months of 2017, even though nearly €17 billion was paid to cover costs for its emissions scandal.
The core auto division of VW has made close to €1.9 billion of cost savings since the beginning of 2017, nearly reaching the budgeted costs cuts for the complete year.
Mueller said the carmaker would maintain strict discipline with spending to shoulder an increase in investment for new technologies.