The Volkswagen Group will invest in a good 180 billion euros in the next 5 years. In particular, the German Group will focus on the investments in areas such as batteries, growth in the North American market, increasing competitiveness in the North American market. regarding digitization and products in China and the expansion of the range.
More and more; specifically, over two-thirds of the investments will be allocated to areas that are decisive for the future such as digitalization and electrification. In the previous plan, this share was 56%.
For example, up to 15 billion euros will be invested in the construction of PowerCo's battery cell factories and in the procurement of raw materials for accumulators. By 2030, PowerCo, the world's largest company. of the Group that deals with the battery business, should generate an annual turnover of over 20 billion euros.
Although the Volkswagen Group will focus on on his electrification project, will not forget; of combustion engines. In fact, investments in the latest generation of endothermic engines will continue. In this sense, the peak of the investments is; forecast for 2025, and then decrease steadily. Arno Antlitz, CFO and COO of the Volkswagen Group, commented:
2022 has impressively demonstrated the robustness of the industry. of our business model. Under challenging conditions, we delivered 572,100 BEVs and increased overall revenue and operating profit. 2023 will not be the same. less challenging, considering general economic developments. However, our strong brands, with a convincing product offering and an order book of around 1.8 million vehicles, allow us to look forward with confidence: we intend to return to generating solid returns. Our strong financial base enables us to continue investing in the electrification and digitization of the Company, even in a challenging economic context.
Talking about what's new of products linked to the electrification strategy, models such as the new ID.3, the ID.7, the ID.Buzz Long Wheel Base, the Cupra Tavascan and the Audi Q8 e-tron will arrive on the market during 2023. Furthermore, the Volkswagen Group confirms its willingness to to launch an “affordable” electric vehicle in 2025 which will be proposed starting from around 25,000 euros and which will be based on; on a new generation of the MEB platform.
SOLID FINANCIAL BASE
The new investment plan is; possible also thanks to last year's results. In 2022, operating margins before extraordinary items grew to 8.1%, thanks to continued price and cost discipline and an improved product mix. The net cash flow of the Automotive Division has increased; amounted to 4.8 billion euros. This is a decrease from the previous €8.6 billion due to supply chain issues. For 2023 it is a clear trend reversal is expected thanks to the possibility of to be able to dispose of more; backorders quickly (backlog of 1.8 million vehicles).
Liquidity is increased. net of the Automotive Division is; increased to 43 billion euros at the end of 2022, supported by the Porsche IPO.
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