By Kim Richters 
 

Volkswagen AG said Thursday that it will spend 89 billion euros ($100.96 billion) over the next five years on future technologies such as electric mobility and digitization.

As part of its yearly budget update, the German car maker said the investment in such technologies would amount to 56% of the total capital expenditure-plan for the period, which stands at EUR159 billion.

The company said it will reduce spending on hybridization and pledged EUR52 billion to accelerate the ramp-up of battery-electric vehicles. "The resolutions passed today show how resolutely we are driving forward the transformation of the Volkswagen Group," said supervisory board chairman Hans Dieter Poetsch. "Our investments will be focused on the future of mobility in all its key aspects and on systematically implementing the Group's strategy."

The German company updates its five-year investment plans each year. Last year, it pledged to spend about EUR73 billion on the development of electric vehicles and other new technologies.

"The additional investment requirement is mainly due to the accelerated ramp-up of e-mobility as part of the Green Deal, as well as the establishment of [our] own battery gigafactories and vertical integration in the battery value chain," said Volkswagen.

The investments were approved alongside a reshuffle of the auto maker's management board that stripped Chief Executive Herbert Diess of some responsibilities after clashes with labor representatives.

Also on Thursday, Volkswagen confirmed that its operating margin should reach the upper end of the target range of 6%-7.5% and deliveries should be around 9 million vehicles in 2021. For 2025-26, the auto maker backed its target of an operating return on sales in the range of 8%-9%.

At 1607 GMT, preference shares in Volkswagen were 1.1% lower at EUR182.38

 

Write to Kim Richters at kim.richters@wsj.com

 

(END) Dow Jones Newswires

December 09, 2021 11:44 ET (16:44 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.
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