Volkswagen (VOWG_p. DE) hopes to eventually become the most profitable maker of electric cars due to some multi-billion euro expansion strategy to mass produce battery driven vehicles,” Chief Executive Herbert Diess stated on Friday.
VW will spend nearly 44 billion euros ($50 billion) on creating electrical automobiles, autonomous driving and new freedom solutions by 2023 and research additional regions of collaboration with U.S. automaker Ford. Diess stated he expected to get an outline agreement on collaboration with Ford fleshed out from the close of the calendar year, with the first focus on commercial vehicles. He added that a merger with Ford wasn’t on the schedule and said there were not any plans to have a stake from the American firm.
Mass producing electric automobiles can assist the carmaker decrease the expense to the exact same amount as present gas vehicles, Diess stated in a news conference in Wolfsburg, VW’s home city.
“Very psychological vehicles, large economies of scale, I believe we’ll be the most profitable firm in electric vehicles,” Diess said, reacting to a query in English.
The board of Europe’s biggest carmaker voted far reaching funds spending plans to start mass production of vehicles in Europe, the most revolutionary strategy change since VW’s gas cheating scandal in 2015.
Volkswagen will retool three of its German plants to construct electric automobiles and to research alliances with battery life spouses and rival carmakers.
VW intends to boost productivity of its own factories by 30 percent by 2025 by constructing more vehicles from various brands on precisely the exact same manufacturing line. It needs to reduce the carmaker’s research and development ratio in the team’s automotive department to half a percentage of earnings from 2020 onward.
“Volkswagen has to be effective, more effective and more rewarding to be able to fund the large cost in he future and keep aggressive,” Diess explained.
Labor unions, who control half of the chairs on Volkswagen’s supervisory board, have to sign off on the strategy to make global manufacturing capacity for 1 million electrical vehicles by 2025 cancel their worries assembling battery driven automobiles will need fewer employees.
Around 436,000 industrial work in Germany are connected with construction gasoline and diesel engined cars.
Jobs are under threat because a gas engined automobile has 1,400 parts in the engine, exhaust system and transmission, whereas an electric car’s battery and engine has just 200 parts, according to analysts in ING.
Volkswagen’s control this week outlined strategies for converting auto plants in Zwickau, Emden and Hannover to develop electric automobiles, supplying job guarantees to employees until 2028.
The initial ID electric automobile is supposed to roll off the production line in Zwickau in 2019, since the plant warms up to a manufacturing capacity of 330,000 electrical vehicles. Zwickau currently assembles the VW Golf and the Golf Estate.
Volkswagen’s MEB electric car system is also being assaulted by Ford since the two companies continue exploratory talks about an alliance to come up with self-driving and electrical vehicles.
“Both businesses complement each other really well regarding both products and areas. The combined development and fabrication of a variety of light industrial vehicles is in the crux of the envisaged collaboration,” Diess explained.
VW anticipates substantial synergy effects from this alliance, which might allow potential for creating a next generation Amarok pickup truck string and additional sports utility vehicles, Diess explained.
Ford Chief Executive Jim Hackett told Reuters that the business was receptive to investment from its own autonomous car company by automakers and many others, but cautioned that expanding partnerships with VW was a “delicate dance”.