German automaker Volkswagen (VOWG_p) has announced its plan to invest 180 billion euros ($192.76 billion) over the next five years in a bid to accelerate its shift towards electric vehicles (EVs) and digitalisation. The investment includes funding for battery production and its operations in North America, as it targets 50% EV sales globally by 2030.
According to the company, over two-thirds of the investment budget will be allocated towards electrification and digitalisation, a significant increase from 56% in its previous five-year plan. VW aims to reduce the spending on combustion engines, with a decline expected from 2025.
Out of the 180 billion euros, 15 billion euros will be earmarked for battery plants and raw materials. The company is also planning to invest 2 billion euros to build a plant in North Carolina for its Scout brand. VW’s North American operations have lagged behind other markets, accounting for only about 5% of global sales, but the company is now looking to turn that around by focusing on the production of electric SUVs and other EVs.
VW is not the only major automaker to commit heavily to EV production, with General Motors and Ford announcing plans to significantly increase their investments in the sector. The shift to EVs has been driven by stricter emissions regulations and the increasing demand for more environmentally friendly vehicles.
As part of its electrification strategy, VW is planning to launch a number of new EV models, including the ID.4 compact SUV, which went on sale in the US last month. The company also plans to launch a range of luxury EVs under its Audi brand, as well as electric versions of its popular Golf and Passat models.
In addition to the investment in EV production, VW is also planning to increase its investment in digitalisation, including autonomous driving and connected car technology. The company has already made progress in this area, with the recent launch of its ID.Light system, which uses light signals to communicate with drivers and passengers.
VW’s latest investment plan is a significant step towards its goal of becoming a leading producer of EVs. As the demand for environmentally friendly vehicles continues to grow, the automaker is positioning itself to take advantage of the shift away from traditional combustion engines.