Volkswagen announces five-year $193 billion investment plan as electrification gathers pace

Persons glimpse at the Volkswagen id excitement electric vehicle all through the push working day at the Los Angeles Car Exhibit in Los Angeles, California, November 17, 2022.

Mike Blake | Reuters

Volkswagen on Tuesday declared plans to devote 180 billion euros ($192.6 billion) between 2023 and 2027, with far more than two thirds concentrating on “electrification and digitalization.”

The German automotive large earlier this thirty day period posted a total-calendar year 2022 running financial gain of 22.5 billion euros, up 13{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} from the past 12 months, with battery and electric car or truck (BEV) deliveries mounting 26{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}.

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The BEV expansion was driven by a 68{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} spike in China, whilst the organization also done the landmark electrification of its plant in Chattanooga, Tennessee.

Nonetheless, general shipping and delivery quantities declined by 7{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} to 8.3 million vehicles in 2022 and the automotive division’s internet funds flows lowered to 4.8 billion euros from 8.6 billion euros in 2021.

In Tuesday’s once-a-year report, the company attributed this to “an boost in performing money thanks to supply chain and logistics issues, primarily to the stop of the yr,” and projected this really should “mainly reverse” in excess of the program of 2023.

CEO Oliver Blume reported Volkswagen “set very clear and bold targets and took required conclusions to streamline procedures” in 2022, even though the coming 12 months will be “decisive” for executing the group’s strategic aims.

Volkswagen Group CFO and COO Arno Antlitz stated that the firm’s sturdy economic situation must permit it to “continue on investing in electrification and digitalization” even in a “challenging financial setting.”

“We have desire fees rising and the total desire is marginally coming down from a purchaser standpoint, from a market place perspective, but on the other hand we are even now operating in an environment, in an financial state, that is characterized by [semiconductor] source that is still not sufficient,” Antlitz instructed CNBC on Tuesday, including that this international shortage of semiconductors is easing.

“Centered on that, we have an get e-book which is virtually 1.8 million autos. Dependent on our sturdy items, sturdy brand names and that get book, we are somewhat confident for 2023.”

Web hard cash flow in the automotive division greater to 43 billion euros by the conclusion of 2022, fueled by the thriving IPO of luxurious brand name Porsche, which reported document earnings on Monday and issued an formidable lengthy-time period outlook.

Francis McGee

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