Volkswagen seeks to be the world’s most profitable electric car firm

Volkswagen announced it plans to spend €44 billion ($50 billion) on new plants, electric cars, autonomous driving, and mobility services.

The war chest is to be spent in the four years between 2019 and 2023 and represents about a third of the company’s total outlay allocated to the four-year period.

“One aim of the Volkswagen Group’s strategy is to speed up the pace of innovation. We are focusing our investments on the future fields of mobility and systematically implementing our strategy,” Herbert Diess, the CEO of Volkswagen, said in a press release, issued after a Supervisory Board meeting Friday.

Diess told CNBC’s Annette Weisbach that he expects the German carmaker to be the most profitable maker of electric cars thanks to its economies of scale. The auto group said it wanted to improve productivity by focusing its electrification strategy within Germany, while pushing some traditional engines to multi-brand factories in eastern Europe.

German plants in Emden and Hanover will be converted to build electric vehicles, while the Volkswagen Passat family will now be built in the Czech Republic. A new location in Eastern Europe will be built for some Skoda and SEAT cars.

VW Group added that it wanted its automotive division to lower its capital expenditure ratio to 6 percent of revenues from 2020 onward.

Diess said VW’s previous “bad behavior” meant that his firm had been “beaten up” by politicians in Germany and abroad but he hoped that relations were improving.

Source: CNBC