Volkswagen to invest €10bn by 2025

Volkswagen will invest more than €10bn by 2025 in areas like electric cars and ride-hailing as it seeks to reshape its business in the wake of its emissions-test cheating scandal, it said yesterday. 

Europe’s biggest carmaker said it would fund what it dubbed “the biggest change process in the company’s history” with an efficiency drive, including integrating components businesses that currently employ 67,000 people in 26 locations worldwide.

“The Volkswagen Group will be more focused, efficient, innovative, customer-driven and sustainable – and systematically geared to generating profitable growth,” chief executive Matthias Mueller said, launching a plan called “TOGETHER – Strategy 2025”.

Volkswagen is battling to recover from the biggest business crisis in its 79-year history after admitting in September to cheating US diesel emissions tests.

The German company has set aside $18bn (€16bn) to cover the cost of vehicle refits and a settlement with US authorities, and analysts expect more fines and legal costs.

The scandal has cast a shadow over the entire market for diesel cars, which account for about half of new vehicle sales in Europe, and has ramped up pressure on Volkswagen to cut costs at its namesake brand, which lags the profitability of rivals.

Spelling out a new strategy ahead of its annual shareholder meeting on Wednesday, the company said it planned to launch more than 30 electric vehicles over the next ten years, forecasting they would account for 2-3 million unit sales in 2025, compared with a tiny number currently.