Volkswagen (VOW3) plans to spend around $50 billion for the development of electric cars, autonomous technology and other mobility services by 2023.
The company hopes to reduce costs through the mass production of electric cars and although the increased spending on new technology is likely to impact earnings initially, Volkswagen’s goal is become the most profitable electric carmaker over time.
Volkswagen will convert three of its factories in Germany for the production of electric vehicles. The company is also exploring its options on whether to produce its own batteries or enter into partnerships with battery manufacturers.
The German carmaker also has broad plans to improve productivity by 30% at its factories by 2025 and also to reduce capital expenditures in the near future. Volkswagen plans to achieve these goals by using the same production lines to build vehicles of different brands and also by relocating the production of certain models to different countries.
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Volkswagen is reportedly looking at possible partnerships with other car companies as well. The company said it is mulling the various aspects of a collaboration with Ford and hopes to figure out more details by the end of 2018. Although Volkswagen currently plans to work with Ford on commercial vehicles, the German automaker ruled out any plans of mergers or investments in its American counterpart.
Volkswagen had been embroiled in a diesel emissions controversy over the past few years and this strategy signals a move in the right direction for the company.