Cars

Published on November 24th, 2015 | by James Ayre

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Volkswagen Slashing Spending By $1 Billion, But Focusing More On Electric Vehicles

November 24th, 2015 by  


Originally published on EV Obsession.

Planned investments into Volkswagen’s Automotive Division will be slashed by around €1 billion in 2016 as a response to the ongoing diesel emissions cheating scandal, according to recent reports.

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Audi e-tron Quattro by Kyle Field | CleanTechnica

The move means that planned investments by the company will be capped at around €12 billion next year. Regardless of that overall cut in investments, the company will actually be increasing its investments into “alternative drive” technologies (electric vehicles, etc) by around €100 million next year as well.

This increased level of investment will be used to move things along at a faster rate, with regard to electric offerings from Volkswagen, Audi, and Porsche.

The Chairman of the Board of Management of Volkswagen AG, Matthias Müller, commented: “We are operating in uncertain and volatile times and are responding to this. We will strictly prioritize all planned investments and expenditures. As announced, anything that is not absolutely necessary will be cancelled or postponed. We are not going to make the mistake of economizing on our future. For this reason we are planning to further increase spending on the development of e-mobility and digitalization.”

Green Car Congress provides more:

Most of the capex is earmarked for new products, the continuing rollout and enhancement of the modular toolkits, and the completion of ongoing investments to expand capacity. Examples include product start-ups such as the next-generation Golf, the Audi Q5, the new Crafter plant in Poland, as well as upfront expenditures for the modular electric toolkit (MEB). Approximately 50% of capex will be spent on the Group’s 28 locations in Germany.

Müller also outlined the first projects as examples where investments are being spread out to a greater extent or cut back. For example, construction of the planned new design center in Wolfsburg is being put on hold, saving approximately €100 million. In addition, the construction of a paint shop in Mexico will be reviewed. In the model range, the successor to the Phaeton—a pure-play electric model—is being delayed.

Apparently, the company’s joint ventures in China won’t be affected, though, as they aren’t consolidated — and investments from these joint ventures are financed with the joint ventures’ own funds.






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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.



  • Matt

    Ok lets talk scale 13b to 12b is a 7.7% drop in investment.
    The 100m increase is only 0.83% of the resultant budget. Hardly what I would call a change in focus.

  • Rich

    “In the model range, the successor to the Phaeton—a pure-play electric model—is being delayed.”
    combined with
    “As announced, anything that is not absolutely necessary will be cancelled or postponed.”
    seems to indicate VW doesn’t believe new Electric Vehicle models are necessary. This is disappointing news.

    “For this reason we are planning to further increase spending on the development of e-mobility and digitalization.” VW could add $10 to the e-mobility budget and this would be a true statement. I look forward to hearing VW’s actual financial commitment to electric vehicles.

  • Marion Meads

    I was expecting of VW to shift 50% of their new CapEx to Electric, and that means at least €6 Billion. An itty bitty teeny tiny eensy weensy €100 million is a real joke. It only means that they would even try harder to invest in cheatwares rather than electric.

    • Epicurus

      Fraud is a safer investment.

  • JamesWimberley

    A €100 million shift in capex towards electric vehicles is welcome, but in a €12 billion total it’s far from the radical rethink that observers like Christiana Figueres have been hoping for.

    • Epicurus

      At the rate plug-ins are selling, ICE manufacturers don’t have the guts to go all in on them. Hell, they don’t even want to advertise the plug-in models they already have.

      • Bob_Wallace

        Doesn’t it seem like manufacturers who want to sell their goods advertise them?

        If it’s a product not many people know about don’t the ads tend to be educational?

        If you build a better mousetrap and tell no one would you expect it to sell?

        • Epicurus

          Right. I don’t get it. Maybe they couldn’t meet the demand if plug-in sales took off because there aren’t enough batteries. Or maybe they secretly don’t want plug-ins to succeed. What do you think?

          • Bob_Wallace

            First, I think no car manufacturers are taking climate change seriously except for Tesla and Nissan/Renault. And I’d give N/R a B or B-. They’ve produced good EVs, tried their hand at battery manufacturing, assisted in installed (slower) chargers but they haven’t brought an A game.

            Then I think the rest are just hanging back. They probably don’t want to give up ICE building and parts dealing. They’re likely run by people who love the roar of an engine in one way or another. I don’t think they’ll make serious moves until they have to. At most they will try to float some sort of “Look at Me!!” prototypes and talk about their Tesla killers while doing damned little.

            GM might be the first to jump in. Along with BMW. But neither have shown me much yet. GM’s got a very good PHEV and is talking a good EV. I’ll give them Gentlemen’s Cs for now. The rest get solid incompletes.

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