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Volkswagen announces $193 billion investment plan over five years as electrification accelerates

People look at the Volkswagen ID Buzz electric car at the Los Angeles Auto Show press conference on November 17, 2022 in Los Angeles, California.

Mike Blake | Reuters

Volkswagen On Tuesday, it announced plans to invest €180 billion ($192.6 billion) between 2023 and 2027.

The German auto giant posted a 13% year-on-year increase in full-year 2022 operating profit to €22.5 billion earlier this month, thanks to a 26% increase in battery and electric vehicle (BEV) shipments.

BEV expansion was driven by a 68% surge in China, and the company also completed a groundbreaking electrification of its factory in Chattanooga, Tennessee.

However, overall shipments fell by 7% to 8.3 million units in 2022, reducing the automotive division’s net cash flow from €8.6 billion in 2021 to €4.8 billion.

In its annual report on Tuesday, the company attributed this to “increase in working capital, especially towards the end of the year, due to supply chain and logistics issues” and expected a “significant reversal” sometime in 2023. There is

Volkswagen CEO Oliver Blume said Volkswagen had “set clear and ambitious targets and made the necessary decisions to streamline processes” for 2022. Next year will be a “decisive” year for implementing the group’s strategic goals.

Arno Antlitz, CFO and COO of the Volkswagen Group, said the company’s strong financial position “enables us to continue investing in electrification and digitalization” in a “challenging economic environment.”

“Interest rates are rising and overall demand is slightly lower from a customer perspective, from a market perspective, but we are still operating in an environment, an economy. [semiconductor] Supply is still not enough,” Antlitz told CNBC on Tuesday, adding that this global semiconductor shortage is easing.

“Based on that, we have an order book of almost 1.8 million units. We are pretty confident in 2023 based on our strong product, strong brand and that order book. “

Successful luxury brand IPO boosts automotive sector net cash flow to €43 billion by end-2022 Porschewhich Reported record earnings on Monday announced an ambitious long-term outlook. Volkswagen announces $193 billion investment plan over five years as electrification accelerates

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