Oliver Blume, CEO of the VW Group, announced investments in EVs and digital technology totaling 122 billion euros today. During the next five years, the Volkswagen Group has committed to spending $131 billion (122 billion euros) on electrification and digitalization.
At least one new North American EV manufacturing plant will be included in the investment, which was revealed at the Company's annual general meeting today in Wolfsburg, Germany.
The ID.7 and ID. Buzz, which will be sold under the VW brand, will make its North American debut in 2024. It has also revitalized the Scout brand, with the first Scout EVs set for production in 2026.
The investment follows the VW Group's €22.5 billion ($24.1 billion) 2022 profit, up 13% from its 2021 performance and at the higher end of its 8.1% anticipated margin. About €15 billion ($16.1 billion) of the committed EV investment has been set aside for battery development, manufacturing, and raw material sourcing.
Nearly two years from now, in 2024, the Volkswagen ID. Buzz electric van is scheduled to go on sale in North America. VW has maintained that it does not require additional EV production facilities in Europe.
It currently has three sites that are either operational or in the planning stages and a Canadian battery facility that will be operational by 2027. Until 2025, when it intends to gradually reduce its investments and redirect them to the development and manufacturing of electric vehicles (EVs), it will continue to grow to spend on combustion engines, delivering a total five-year development investment of $193.15 billion (€180 billion).
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"We have made the required measures to streamline procedures in the financial year 22. In addition, we have established clear, ambitious goals. According to Oliver Blume, CEO of VW Group, "FY23 will be a pivotal year for executing strategic plans and increasing growth across the Company.
"Despite significant challenges, we made progress on carrying out our objectives. BEVs received a record-high 7% of all deliveries, a considerable achievement we plan to enhance this year as our well-liked model lineup expands. In addition, electrification and digitization now account for 68% of Volkswagen's projected future investments, up from 56% in the Company's previous five-year plan, according to the Company's former CEO Herbert Diess' 2018 announcement.
Lessons learned from the semiconductor crisis have been internalized by the VW Group, which nonetheless managed to generate an operating margin of 8.1% despite a 7% reduction in global deliveries to 8.3 million vehicles.
With over 100,000 sales, Porsche's Taycan EV has improved the model used by the Volkswagen Group. With Porsche's profits propelling it to reach net liquidity of €43 billion, a rich model mix with a more significant percentage of higher-margin models left the automotive division with €4.8 billion in net cash flow.
Additionally, it states that it has a backlog of orders totaling 1.8 million for the current fiscal year.
Once a portion of Porsche was successfully floated, it appears that the battery startup Powerco, anticipated to generate €20 billion in annual sales by 2030, will be the next Volkswagen Group company to be floated.
Battery-powered vehicles made up 7% of VW Group sales in 2022, with EV sales growing by 26%, even though they account for 16% of the Volkswagen Group's forward order book. Only Lamborghini has yet to confirm a plan for EV production among the VW brands (Audi, Bentley, Seat, Skoda, Porsche, Lamborghini, and Volkswagen).
However, an EV is speculated to be arriving in the second part of the decade.
The Volkswagen ID.4 (193,200 sales), Volkswagen ID.3 (75,600 sales), and Skoda Enyaq iV were the top-selling EVs for the Volkswagen Group in 2022. (53,700).
With a target penetration of 10% EVs in 2023, it already has plans to introduce the improved ID.3, ID.7, and ID. Buzz long wheelbase, Cupra Tavascan, and Audi Q8 e-tron this year.
Not all of Volkswagen's news is good; the Company is still dealing with the issue at the highly regarded Cariad digitalization arm, which lost €2.1 billion on only €800 million in revenue last year. Diess established the Berlin-based business to create digital and software solutions for the VW Group.
