VW shows confidence in electric future with higher margin target
- Raises the 2025 operating margin target to 8-9%
- Battery EVs will represent half of the group’s sales by 2030
- Strength of current activity to fund huge investments
WOLFSBURG, Germany, July 13 (Reuters) – Volkswagen (VOWG_p.DE) on Tuesday raised its long-term profitability target, a sign of the German automaker’s growing confidence in managing the switch to electric and autonomous vehicles.
Outlining its strategy until 2030, Europe’s largest automaker also said it expects half of its global vehicle sales to be battery-powered by that date, joining rivals in setting ‘ambitious goals to exit the era of combustion engines.
The goals precede a broad set of climate policies that the European Union plans to announce on Wednesday, possibly including a de facto ban on gasoline vehicles from 2035.
At Volkswagen, which aims to overtake Tesla (TSLA.O) as the world’s largest electric vehicle (EV) maker by 2025, battery-powered EVs made up just 3% of global sales last year.
“We have set ourselves a strategic goal to become the global market leader in electric vehicles – and we are on the right track. Now we are setting the parameters,” said Managing Director Herbert Diess.
After reporting spectacular first-half results last week, Volkswagen said it expected the strong performance of its existing business to help fund 150 billion euros ($ 178 billion) of investment in ‘by 2025 in areas such as batteries and software.
He added the synergies between technologies and brands, which range from budget seats and Skodas to high-end Audi and Porsches, also gave him the confidence to increase his target of return on operating sales for 2025 at 8-9% against 7-8%.
Automakers have set themselves a series of goals for an electric future. Last week, Stellantis (STLA.MI) said it was targeting more than 70% of sales in Europe and more than 40% in the United States to be low-emission vehicles by 2030. This includes hybrid vehicles. , as well as all electric. battery cars. Read more
Volkswagen announced last month that it would stop selling gas guzzlers in Europe by 2035 and later in China and the United States as part of its transition to electric vehicles. Read more
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Reporting by Christoph Steitz; Editing by Douglas Busvine and Mark Potter
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