Volkswagen accelerates push into electric cars with £30 billion spending plan

Frederick Owens
November 18, 2017

German company Volkswagen is planning to 2025 to invest about $ 12 billion in the development and production of electric cars and plug-in hybrid cars on the territory of China.

It is worth Recalling that in 2019, the Chinese government will impose strict environmental quota, which will force automakers to increase sales and manufacturing of electrified vehicles.

Volkswagen's supervisory board is discussing a five-year spending plan totaling more than 70 billion euros ($82.5 billion) to transform the group into a leader in electric cars, a person familiar with the talks told Reuters.

Carmakers that do fall short will be required to buy credits. The new legislation is prompting a flurry of electric auto deals and new launches of all-electric and plug-in hybrid models as manufacturers in China race to ensure they do not fall short.

Volkswagen now has around 10 NEVs already on the market in China, although all are imported models with limited sales volumes, according to a company spokeswoman.

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Electric cars will outsell fossil-fuel powered vehicles within two decades as battery prices plunge, turning the global auto industry upside down and signalling economic turmoil for oil-exporting countries.

Volkswagen's logos are pictured at the 45th Tokyo Motor Show in Tokyo, Japan October 25, 2017. Some of these models possess an ability to go up to 400-600 kilometers in a single charge. By comparison, Tesla's (TSLA.O) model S has a range of 490km and as much as 632km depending on battery capacity, according to the company.

Under the new quota eight per cent of new cars built in China must be electric and these targets must be met in 2019.

Heizmann said, "We need high volumes of new energy vehicles... we are working on full speed on that".

The Volkswagen group believes that its group companies and joint venture partners in China will generate enough NEV sales to meet quotas by 2019. VW's core autos division has made cost savings of about 1.9 billion euros since the start of this year, almost meeting budgeted cost cuts for the full year.

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