The carmaker is clear about its future direction. Years ago, the biggest technological advance one could find in a car was the radio, and no one even dreamed of electric motors back then. Today, it is standard for cars to be equipped with latest electronics with integrated computer systems, complex software and other features. Nowadays, strict emission limitation policies are forcing manufacturers to adapt to market change and introduce innovations aimed at producing environmentally friendly vehicles. It seems that Volkswagen is leaving nothing to chance and plans to invest heavily in the further digitalisation and electrification of its vehicles.
The carmaker is clear about its future direction. Years ago, the biggest technological advance one could find in a car was the radio, and no one even dreamed of electric motors back then. Today, it is standard for cars to be equipped with latest electronics with integrated computer systems, complex software and other features. Nowadays, strict emission limitation policies are forcing manufacturers to adapt to market change and introduce innovations aimed at producing environmentally friendly vehicles. It seems that Volkswagen is leaving nothing to chance and plans to invest heavily in the further digitalisation and electrification of its vehicles.
Huge investments
The coming years will be years of innovation for Volkswagen. The Group has announced that between 2023 and 2027, they will direct their investments towards the enhancement of electrification and digitalisation. The investment is expected to be worth €180 billion, with more than two-thirds of it going to the aforementioned segments.
Company results
The German company achieved excellent results in 2022, with full-year operating profit of €22.5 billion, up 13% on 2021. Volkswagen sees the next year positively. The official outlook for next year has boosted the shares and they have seen a sharp rise. The carmaker is forecasting a 10% to 15% increase in sales on a 14% increase in deliveries despite supply chain disruptions. The company's profit margin reached 8.1% in 2022, putting it at the high end of the forecast [1].
Volkswagen AG's stock performance over the last 5 years. (Source: Investing) *
Not just Europe but also Canada
The carmaker is starting its plans in Canada, which will feature their first battery cell plant outside of Europe, with production starting in 2027. Further plans within Europe will be heading to Spain, as the company will be submitting a new application for EU funding in the country. The aim is to start production of a new electric vehicle. Whether the plan becomes a reality will depend on the approval of financial subsidies, but also on the viability of the project. Plans that have already been confirmed include the production of the EV at SEAT's plant in Catalonia and, around the same time, at VW's plant in Navarre. The German carmaker is overall ramping up investment in EVs in full swing and looks set for a promising future – thus investors can probably look forward to further gains.
Adam Austera, chief analyst Ozios
* Past performance is no guarantee of future results.
[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or based on the current economic environment, which may change. Such statements are no guarantee of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.