Volkswagen shifts R&D focus to digitisation, more electromobility

November 17, 2020 // By Christoph Hammerschmidt
Volkswagen shifts R&D focus to electromobility, digitisation
Driven by the prospect of a sustained tightening of climate legislation, changed user behaviour and increasing competition in the USA and China, the Volkswagen Group has decided to shift its investment focus. Digitisation as the key topic will be significantly strengthened, with around 27 billion euros being invested by the middle of the decade, around twice as much as in the previous planning period. Around 35 billion euros will be invested in e-mobility. A further 11 billion euros are planned for the hybridisation of the model portfolio.

The company's supervisory board has redefined the capital expenditure and development costs for e-mobility, hybridisation and digitisation for the next five years. The share of future investments in the planned total expenditure of around 150 billion euros will increase to around 50 percent, compared with around 40 percent in the pre-planning period.

"We set the course for a battery electric future in the Volkswagen Group at an early stage. In the next few years, it will be important to also take a leading position in the field of software in the vehicle. Only as a digital mobility group will we be able to meet people's needs for individual, sustainable and fully networked mobility in the future," explained CEO Herbert Diess.

At around 27 billion euros, investment in digitisation was doubled compared to the previous planning round due to its outstanding importance for the future viability of the Group. This includes expenditure for Volkswagen’s Car.Software organisation, which was successfully launched this year and is developing, among other things, a standardised operating system for the vehicles of the Group brands. Initially, its use in the Audi project Artemis is planned for 2024. The company's own contribution to the software is to increase from 10 to 60 percent. In addition, a large part of the funds in the area of digitisation will flow into the success-critical topics of artificial intelligence, autonomous driving and the digitisation of essential corporate processes.

The planning round is based on the expectation that the global economy will grow moderately over the next five years. Moderate growth with regional differences is also assumed for the individual markets. The company also expects a 30 per cent increase in productivity; moreover, management intends to make cuts in administration in order to financially secure the transformation. Not included in the plans are Volkswagen's joint venture companies in China, as they are not part of the scope of consolidation and finance investments in

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