Volkswagen AG (VOW.XE) said Friday that it plans to invest 34 billion euros ($40.03 billion) by the end of 2022 as it bids to position itself as a market leader in electric and autonomous vehicles.
The German car maker said most of the investment would be directed toward the electrification and hybridization of all group models. The company has previously stated that it aims to electrify its entire portfolio by 2030.
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"With the planning round now approved, we are laying the foundation for making Volkswagen the world's number-one player in electric mobility by 2025," said group Chief Executive Matthias Mueller.
As part of its pivot toward electrification, Volkswagen said that it would remodel its plant in Zwickau, Germany, to exclusively manufacture electric vehicles.
The company said it would concentrate production of its Passat vehicles at its Emden site from 2018, while Golf models will be manufactured at Wolfsburg from the next generation onward.
Volkswagen retained its target of lowering capital expenditure and development cost ratios to 6% by 2020. For the third quarter of 2017, Volkswagen's automotive division reported a capex ratio of 6.3% and a research-and-development ratio of 6.6%.
The company consistently outspends its peers in capital investment and development expenditure--both in absolute terms and as a proportion of sales--according to analysts at Evercore ISI. In 2016 Volkswagen spent EUR26.5 billion compared with EUR19 billion at Toyota Motor Corp. (TM) and EUR14.6 billion at Daimler AG (DAI.XE).
Write to Max Bernhard at Max.Bernhard@dowjones.com; @mxbernhard
(END) Dow Jones Newswires
November 17, 2017 08:36 ET (13:36 GMT)