Volkswagen AG raised its five-year spending plan and overhauled its management board, seeking to catch up with Tesla Inc. and end an internal dispute over the changes needed to get there.
The German company will invest 159 billion euros ($180 billion) in total in the next half decade, of which 89 billion euros are for technologies like software and electric cars. That’s more than in last year’s rolling plan, pointing to a faster departure from combustion engines. By 2026, about a quarter of all sales will be electric only, VW predicted.
VW’s aggressive transformation hasn’t been without controversy, and Chief Executive Officer Herbert Diesshas come under fire from labor representatives accusing him of plotting mass layoffs to make VW more nimble.
Diess’s position at the helm was the subject of public debate in recent weeks, and Chairman Hans Dieter Poetsch sought to quell any speculation today about his future by calling Diess an “agent of change.” At the same time, the CEO ceded some tasks to others on the management board, which has now swelled to 12 members.
“Our exceedingly robust and solid financial base enables us to finance the necessary investments on our own,” Poetsch said in a statement. “We are also therefore very confident that these investment decisions will steer the Volkswagen Group to future success.”
Tesla has leapfrogged other auto manufacturers by adopting an aggressive build schedule; funded in part by the proceeds from carbon credits sold to it competitors. In today’s environment, corporate boards are under increasing pressure to leverage their balance sheets because of the success of companies like Tesla.Click HERE to subscribe to Fuller Treacy Money Back to top