VW embarks on $50 billion electrification plan

VW embarks on $50 billion electrification plan

VW embarks on $50 billion electrification plan

Diess said he hoped to have an outline agreement on Ford cooperation fleshed out by year end, with the initial focus on commercial vehicles.

Chairman Hans Dieter Poetsch told a news conference Friday that the company's plans for the next five years aim to make Volkswagen "a worldwide supplier of sustainable mobility".

"Over the coming five years to the end of 2023, the company will be spending nearly 44 billion euros alone on the future issues of e-mobility, autonomous driving, new mobility services and digitalisation", VW said in a statement.

Major auto companies are ramping up their offerings of electric cars to compete with Tesla. And in Europe, manufacturers need battery-powered vehicles to meet tougher limits on carbon dioxide emissions from 2021. Volkswagen has gotten into a position where the upgrades are necessary.

Ford makes about 40% of all full-size pickups sold in the U.S., while VW sells nearly 15% of the vehicles purchased in China, the world's largest auto market.

Major new models unveiled in recent weeks from Daimler's Mercedes-Benz and Volksagen's Audi brand have been expensive SUVs; Audi's e-tron starts at a German price of /////EURO SYMBOL///// 80,000 ($120,000).

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VW's upcoming I.D. compact could take mass-market buyers from Tesla's Model 3, a mass-market auto with a base price of $46,000 before tax credits. In reality, though, you can't order one yet for less than $60,000. To support the plans, the company has secured supply contracts for enough batteries to power 50 million electric cars.

In a nod to concerns about job losses, Diess acknowledged that electric motors, which require fewer parts than combustion engines, are "much less complex" to build.

Automakers are spending billions of dollars as they try to develop the electric and self-driving vehicles they believe are the future. The lack of charging points is another, leaving many owners of electric vehicles to use them mainly in cities or for shorter trips. How long will it take to produce fifty million electric cars?

As part of those efforts, the group intends to increase productivity and bundle production of different models to achieve economies of scale across brands.

The company said it would begin local production of electric-powered vehicles at its facilities in Emden and Hannover in 2022, adding that a plant in Zwickau has already been designated for e-car production.

Volkswagen is preparing to expand into the market for electric cars, in connection with which the German automaker will have to significantly shuffle the production of their models with the engine to make space for electric cars.

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