Volkswagen aims to produce almost 50 per cent more electric cars than it previously targeted, boosting a bet that has already strained profit margins.
The world’s largest carmaker now plans to build 22 million vehicles over the next 10 years, compared with an earlier goal of 15 million.
Return on sales fell last year at the company's three core brands VW, Porsche and Audi as trade wars, a Chinese slowdown and new emissions testing in Europe added to costs.
Chief executive officer Herbert Diess is pushing forward with the plan to electrify VW's fleet and overtake Tesla even though buyers staying on the fence mean the payoff could be years away.
The German carmaker already has the industry’s most aggressive e-car plan, and is in advanced talks with Ford Motor to work together on autonomous driving and other areas.
“The supertanker is picking up speed,” Mr Diess said on Tuesday in speech notes while presenting full-year earnings. “We are aligning Volkswagen with e-mobility like no other company in our industry.”
Mr Diess, like other carmaker CEOs, is under pressure to find savings while he funnels more cash toward the company’s biggest transformation in decades.
VW is spending €44 billion up to 2023 on electric and connected cars. Keeping profitability level this year from 2018 will be an achievement given the US-China trade spat and falling demand in China, VW's biggest market, Mr Diess said.
Market conditions
Volkswagen stock has declined 5.7 per cent in the past year, compared with a 21 per cent drop in the Stoxx Europe 600 Automobiles and Parts Index.
Mr Diess said VW was also making progress on a plan for a partial share sale in trucks unit Traton. A date would be agreed "in the foreseeable future", with VW weighing up market conditions "in the next days".
The company is also in talks to deepen a co-operation with Ford beyond working together on vans, adding on Tuesday that discussions about further possible collaborations in e-mobility and autonomous driving are at an advanced stage.
Mr Diess said VW may take a stake in the self-driving car project with Ford. It’s also considering acquisitions of software suppliers.
VW last month already presented preliminary earnings that met expectations. – Bloomberg
