FRANKFURT AM MAIN - German automaker Volkswagen on Friday said it planned to invest more than 34 billion euros (R528-billion) over the next five years in new technologies to advance its push to become a global leader in electric cars.
"We are reinventing the car," chief executive Matthias Mueller said after a meeting of the group's supervisory board at its Wolfsburg headquarters.
The bulk of the 2018-2022 spending spree would go on developing electric and hybrid cars, VW said in a statement, as well as self-driving cars, new mobility services such as car-sharing, and digitalisation.
Like other traditional carmakers, Volkswagen is stepping up its focus on the cleaner, smarter vehicles of the future, racing to catch up with US tech giant Tesla which has a head-start in the area.
The pivot to zero-emissions cars is particularly important for Volkswagen as it seeks to shake off a global emissions cheating scandal that shone a spotlight on polluting diesel engines.
The VW group, owner of 12 brands including Audi, Porsche and Skoda, announced in September that it planned to electrify its entire fleet by 2030 - promising fully electric or hybrid versions of some 300 models.
At its meeting on Friday, the supervisory board signed off on an overall five-year spending plan totalling "more than 70 billion euros", a spokesman told AFP.
"With the planning round now approved, we are laying the foundation for making Volkswagen the world's number one player in electric mobility by 2025," said Mueller.
The push into e-mobility comes as China, the world's biggest car market, is shaking up the industry by requiring automakers to produce a minimum number of e-cars from 2019.
Volkswagen on Thursday already unveiled plans to invest more than 10 billion euros in new energy cars with local partners in China by 2025, a figure that is not included in the 70 billion.
Although the VW group is betting big on future technologies, Mueller said it would not be sidelining existing projects, "since this is how we will earn our money for the foreseeable future."
VW's 70-billion-euro spending plan is lower than the 2015-2019 investments announced in 2014, when the group pledged to spend nearly 86 billion.
But that was before VW was hit by the "dieselgate" scandal, which has so far cost it over 25 billion euros in fines, recalls and compensation.
The crisis erupted in 2015 after the group admitted to installing cheating software in 11 million engines worldwide designed to dupe pollution tests.
The scandal tarnished the reputation of the proud German behemoth and it remains mired in legal woes, especially in the United States and Europe.
But VW held onto its crown as the world's largest automaker and the group's share price recently recovered to pre-crisis levels.
As part of a wider overhaul to cut costs and improve efficiency, VW said it intends to bring its investment ratio in the automotive division down to six percent of sales by 2020, from a hefty 6.9 percent last year.
It also said that plans to cut some 23,000 jobs at its own-brand unit in Germany - without resorting to forced redundancies - were ahead of schedule with some 9,000 workers accepting early retirement.