The Volkswagen Group has announced that it will accelerate its investments in electric mobility, software, and autonomous driving in the coming years; its objective is to close the gap with Tesla, whose leadership position in these fields has been praised on several occasions by Herbert Diess, director German company executive.
“The Volkswagen Group continues its transformation into a digital mobility company. As decided in Planning Round 69, the Group will spend around 73 billion euros on electrification, hybrid powertrains, and digital technology over the next five years. This was announced after today’s Supervisory Board meeting.
Investments in R&D for future technologies will rise to 50% from the current 40% of the Group’s total investments. Investments in digitization will double to € 27 billion by the middle of the decade, reflecting the Group’s strong focus on creating software. Approximately 35 billion euros will be spent on battery electric vehicles. Roughly another 11 billion euros have been earmarked for the development of hybrid cars.”
Following this announcement, Herbert Diess himself confirmed that this ambitious investment plan is intended to stand up to Tesla. “Yes, it is going to be a race with Tesla. They are also increasing [their production capacity] rapidly. We have more body styles, and when it comes to an established dealer network, we should have an advantage over Tesla.”
The truth is that, even though Tesla is currently building several factories (Giga Berlin, Giga Austin), expanding the capacity of others (Giga Shanghai), and making its main plant in Fremont work at maximum capacity, the Volkswagen Group has dozens of factories around the world, so Tesla’s manufacturing capacity advantage may not last long.
A different case is that of the American brand’s advantage in terms of electrical technology, software, and autonomous driving. Although Volkswagen is investing heavily in these fields and has even partnered with Ford to support the developments of Argo AI (a self-driving company similar to General Motors’ Cruise), there is still a long way to go. Will Volkswagen achieve its goal of eventually surpassing Tesla? We may not know until the middle of the decade.