VW Adds Another $10 Billion to its Five Year EV Plan

Volkswagen plans to spend a total roughly $50 billion (44 billion euros) on electric vehicles, digitalization, and autonomous driving by 2023. That’s up from the roughly 34 billion euros VW said it planned to spend last year.

The automaker’s top brass also said announced that it would be improving productivity in its factories by 30% by 2025. It would achieve this by building more vehicles form different brands on the same line.

This follows the news that the European Passat will be built by Skoda, and aligns with VW’s EV strategy, which has Porsche and Audi (and maybe even Bentley) using the same electric architecture in all of its vehicles.

Skoda, SEAT, and VW will all also use the same MEB platform, which could also allow for factory sharing.

By doing this, VW intends to lower its capital expenditure ratio in its automotive division to 6% of revenues from 2020 forward.

“Volkswagen must become more efficient, more productive and more profitable in order to finance the high expenditure in the future and stay competitive,” CEO Herbert Diess said during a press conference.

Diess added that he intended to have an outline of VW’s agreement with Ford finished before the end of the year. He also said that a merger with the company is not on the table.

These decisions, along with VW’s announcement earlier this week that it would convert three of its plants to EV production, are causing concern among VW’s labor unions.

Despite VW saying that it could build as many as 15 million cars in the next few years, the unions are concerned by the reduced labor requirements in EV plants. Since engines are complicated and contain considerably more parts than electric motors, VW may find itself needing fewer employees at its plants.