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VW will spend almost 44 billion euros ($50 billion) on
developing electric cars, autonomous driving and new mobility
services by 2023 and explore further areas of cooperation with
U.S. automaker Ford.
Diess said he hoped to have an outline agreement on cooperation
with Ford fleshed out by the end of the year, with the initial
focus on commercial vehicles. He added that a merger with Ford
was not on the agenda and also said there were no plans to take
a stake in the American company.
Mass producing electric cars will help the carmaker reduce the
cost to the same level as current diesel vehicles, Diess said at
a news conference in Wolfsburg, VW's home town .
"Very emotional vehicles, high economies of scale, I think we
will be the most profitable company in electric vehicles,” Diess
said, responding to a question in English.
The supervisory board of Europe's largest carmaker voted on far
reaching capital spending plans to begin mass production of
electric vehicles in Europe, the most radical strategy shift
since VW's diesel cheating scandal in 2015.
Volkswagen will retool three of its German plants to build
electric cars and to explore alliances with battery partners and
rival carmakers.
VW plans to increase productivity of its factories by 30 percent
by 2025 by building more vehicles from different brands on the
same production line. It wants to lower the carmaker's research
and development ratio at the group's automotive division to six
percent of revenues from 2020 onward.
"Volkswagen must become more efficient, more productive and more
profitable in order to finance the high expenditure in he future
and stay competitive," Diess said.
JOBS FEAR
Labor unions, who control half the seats on Volkswagen's
supervisory board, need to sign off on the plan to create global
production capacity for 1 million electric vehicles by 2025 amid
their concerns that assembling battery driven cars will require
fewer workers.
Around 436,000 industrial jobs in Germany are tied to building
petrol and diesel engined vehicles.
Jobs are under threat because a combustion engined car has 1,400
components in the motor, exhaust system and transmission, while
an electric car's battery and motor has only 200 components,
according to analysts at ING.
Volkswagen's management this week outlined plans for converting
car plants in Zwickau, Emden and Hannover to build electric
cars, providing job guarantees to workers until 2028.
The first ID electric car is due to roll off the production line
in Zwickau in 2019, as the plant ramps up to a production
capacity of 330,000 electric vehicles. Zwickau currently builds
the VW Golf and the Golf Estate.
Volkswagen's MEB electric vehicle platform is also being eyed by
Ford as the two companies continue exploratory talks about an
alliance to develop self-driving and electric vehicles.
"Our two companies complement each other very well in terms of
both products and regions. The joint development and manufacture
of a range of light commercial vehicles is at the core of the
envisaged cooperation," Diess said.
VW expects significant synergy effects from this alliance, which
may allow potential for developing a next generation Amarok
pickup truck series and further sports utility vehicles, Diess
said.
Ford Chief Executive Jim Hackett told Reuters this week that the
company was open to investment in its autonomous vehicle
business by automakers and others, but cautioned that expanding
partnerships with VW was a "delicate dance."
($1 = 0.8778 euros)
(Reporting by Edward Taylor; Editing by Alexandra Hudson/Keith
Weir)
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