Volkswagen says to invest 44 bn euros in e-cars by 2023

Volkswagen says to invest 44 bn euros in e-cars by 2023

Volkswagen on Friday said it would invest 44 billion euros ($50 billion) over the next five years in the smarter, greener cars of the future as the German auto giant ramps up efforts to catch up with foreign rivals.

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

The figure represents roughly a third of the group's planned expenditure over the period, underscoring how serious VW is about closing the gap with Asian competitors and the likes of US tech giant Tesla.

As part of the new strategy, VW will convert two existing German plants into assembly lines for all-electric vehicles from 2022.

The plan in Emden will focus on building small electric cars and sedans for several of the group's 12 brands, while the Hanover plant will make the I.D. Buzz, the zero-emission version of VW's iconic camper van.

VW has promised to guarantee jobs at both sites until 2028.

"We are making our plants fit for the future," VW board member Oliver Blume said in a statement after a meeting of the supervisory board.

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

"German plants are particularly well suited to making the transformation to the production of electric vehicles, given the high manufacturing expertise and qualification level of our employees," said Blume.

VW said it also plans to open a new factory at a yet to be determined location in eastern Europe.

The pivot towards e-cars, self-driving and connected vehicles has in part been spurred by Volkswagen's efforts to shake off the "dieselgate" emissions cheating scandal.

The group was forced to admit in September 2015 that it had installed cheating software in 11 million diesel vehicles to dupe pollution tests.

Suspicions of trickery later spread to other carmakers too, badly hurting the industry's reputation.

The saga has also fuelled a backlash against diesel, with a string of German cities facing driving bans for the oldest, most polluting diesel cars.

The scandal has so far cost VW more than 27 billion euros in fines, buybacks and compensation and the company remains mired in legal woes around the world.

Nevertheless drivers have remained loyal, helping Volkswagen to record sales last year.

The group said last month it was on track to beat last year's revenues of 231 billion euros.