The Volkswagen Group on Thursday provided an update on its strategy for the coming decade, and key among the plans is an investment totaling 89 billion euros (approximately $100.5 billion) on future technology.
The investment covers the next five years and, for the first time, represents more than half of the automaker's total capital expenditure for the five-year period, which in this case is 159 billion euros.
A total 52 billion euros will be spent on developing electric vehicles. The figure is 50% higher than previously planned due to growing demand for EVs. VW Group currently estimates that EVs will represent 25% of its sales by 2026, up from about 5% today. That's a lot of EVs considering VW Group is on track to deliver nine million vehicles in 2021. The automaker sees itself becoming the biggest EV company in the world by 2025.
Some of the funding for EVs will be diverted away from development of hybrid vehicles which VW Group had planned to offer as an intermediate technology.
Volkswagen Group strategy update - December 9, 2021
Another major portion of the investment, around 30 billion euros, will go toward software development, an area that covers software as a service and self-driving cars. VW Group estimates that a third of mobility-related revenues from the global market will come from software-based services by 2030. VW Group isn't alone in this thinking. Stellantis this week said it expects to generate 20 billion euros from software-based services by 2030.
During the strategy update announcement, VW Group also confirmed a California camper version of the upcoming ID.Buzz electric van. The automaker also made mention of an Audi model code-named the E6. No details on timing for either model was mentioned.
Finally, the automaker also mentioned a reshuffle of some executives planned for 2022. Herbert Diess is set to remain as CEO, though he will also take over the Cariad software development arm which is currently being managed by Audi CEO Markus Duesmann.
Ralf Brandstaetter, CEO of the Volkswagen brand, will join VW Group's board and also be responsible for the automaker's Chinese operations.