Volkswagen Is Spending $100 Billion On Electric Vehicles

Volkswagen is hiking its electric vehicle investment to $100 billion.

Last week, the German automaker announced that roughly 25% of its vehicles sold will be electric within the next five years — marking a significant increase over its current production levels.

CNN Business reported:

As it prepares for that shift, VW will spend €89 billion, the equivalent of a little more than $100 billion, to speed its push towards electricification. This marks the first time VW is budgeting more than half its total spending — which totals roughly $180 billion — for EVs. At the same time, expenditures on hybrid vehicles, which use batteries along with gasoline engines will be reduced by 30%.

The expenditures will include new factories, such as a new plant at the companies headquarters at Wolfsburg, Germany. VW’s Project Trinity, a new flagship electric car planned for around 2025, will be built at Wolfsburg. VW also outlined plans for a number of new facilities throughout Europe.

Volkswagen is also planning to create a separate battery manufacturing company. The battery business is expected to generate up to €30 billion in revenue which is more than the company’s Skoda passenger car division currently generates, according to VW.

Many other established automotive firms are pivoting toward electric vehicle production as the American regulatory and consumer preference landscapes continue to shift. 

For instance, as part of its plan to spend $13 billion on electric vehicle manufacturing investments across the globe, Toyota revealed that it will construct a $1.29 billion electric car battery facility in North Carolina which will eventually employ 1,750 people. The plant’s four production lines will each be capable of producing battery packs for 200,000 cars per year. 

Top White House officials — including President Joe Biden himself — are quick to endorse electric vehicle production. In October, Biden claimed that those traveling in electric vehicles can cross the United States on “a single tank of gas, figuratively speaking.” Likewise, Transportation Secretary Pete Buttigieg asserted that the pending “Build Back Better Act” would ensure that Americans “never have to worry about gas prices again.”

“The people who stand to benefit most from owning an EV,” Buttigieg commented, “are often rural residents who have the longest distances to drive, they burn the most gas, and underserved urban residents in areas where there are higher gas prices and lower-income. They would gain the most by having that vehicle. These are the very residents who have not always been connected to electric vehicles that are viewed as kind of a luxury item.”

Progressive lawmakers are following suit. Earlier this year, Sen. Alex Padilla (D-CA) and Sen. Dianne Feinstein (D-CA) requested that President Biden “follow California’s lead and set a date by which all new cars and passenger trucks sold be zero-emission vehicles.” The letter also presses Biden to use the deal that Ford, Honda, BMW, and Volkswagen struck with the state of California: “We believe the national baseline should, at an absolute minimum, be built around the technical lead set by companies that voluntarily advanced their agreements with California. … California and other states need a strong federal partner.”

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