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VW five-year investment plan: over 120 billion euros for electrification and digital

VW plans to invest a total of EUR 180 billion over the five years to 2023 (mainly in R&D and capital expenditure), 68% of which will be directed towards electrification (e.g. BEV-related) and digitalisation (e.g. in-car software development, automated driving and business DX).

VW traditionally reveals its total investment budget for the following five years around November each year. The last time this was announced in December 2022, the budget for the five years to 2026 was EUR 159 billion, with electrification and digital accounting for 56%.

This may be seen as a positive sign of a significant increase in investment to promote the shift to BEVs and to strengthen the lagging development of in-vehicle operating systems. On the other hand, it could also be interpreted as an increase in the investment burden due to rising costs of raw materials and energy. The negative impact of increased procurement costs for E-drive-related raw materials and components, such as batteries, and energy inflation is serious for European-based manufacturers, which have traditionally been at a disadvantage in terms of cost competitiveness.

Manufacturers focusing on BEV conversion, such as VW, generally expect that their investment in ICE will peak out in the late 2020s and that R&D and Capex costs can be curbed to some extent. The German automotive industry, including VW, is going carbon-neutral, and the DX The strategic directions and challenges are summarised in detail.