VW boosts investments in future tech

Europe's largest car manufacturer plans to spend 73 billion euros ($85.1 billion) by 2025 on "electrification, hybrid powertrains and digital technology", around half its total expenditure for the period, as part of a "transformation into a digital mobility company", the company said in a statement. 

It comes as part of a five-year funding allocation that the board of VW presents each year, and marks a rise in research and development from 60 billion euros committed for 2020-2024.

VW, like other car makers, is racing to meet EU emissions targets, as it tries to shake off the long-running "dieselgate" scandal involving cheating software it illegally installed in 11 million cars.

The company's investments in digitalisation, which includes self-driving technology, apps and over-the-air software updates were significantly boosted, doubling to 27 billion euros by the middle of the decade.

"Only as a digital mobility group can we meet people's needs for individual, sustainable and fully networked mobility in the future," chief executive Herbert Diess said, adding that it will be "crucial" for VW to reach a leading position in car software.

Around 35 billion euros will be spent on developing battery-electric cars and 11 billion earmarked for hybrid vehicles of existing models, VW said.

VW said it assumes "moderate growth" in the global economy over the next five years and anticipates a 30-percent improvement in productivity amid savings in administration.

Last year, VW said it would slash 7,000 jobs by 2023.

The Wolfsburg-based company, whose brands include Audi, Porsche and Skoda, said it envisages the production of 26 million electric cars by 2030, as it intends to launch 70 electric models by 2030, with 20 already in production.

VW posted a net profit of 2.8 billion euros in the three months to the end of September, returning to the black after a dismal 1.5 billion euro loss in a second quarter heavily impacted by the coronavirus pandemic.