VW to take on Tesla with US$127 billion EV investment including direct Model 2 competitor
Volkswagen announced its plans to get out of its electrification doldrums resulting from supply chain issues and software development mishaps with the largest single investment unveiled by any automaker so far. It will pour the equivalent of US$193 billion into developing new software and vehicles, including a direct Tesla Model 2 competitor.
The tentatively called VW ID.Golf will be detailed tomorrow and will cost about US$26,000 before subsidies. VW plans to release the Model 2 competitor in 2025 which, as it happens, might coincide with Tesla's launch plans as it intends to out the Model 2 within its current 5-year period that ends in 2026.
Other than its first mass market EV, VW plans to pour US$15 billion into building battery factories and securing raw materials deals with the goal to cut the battery prices significantly. It already has three cell plants on the schedule for Europe and just announced another one, this time in Canada, lured by up to US$10 billion in US government subsidies.
About US$127 billion of the huge investment outlay that VW announced will directly go to electrification and digitization, with the goal to have 20% of its sales be purely electric in 2025. "On the other hand we need to keep combustion engines competitive... that is a double burden," added VW's Chief Financial Officer Arno Antlitz, detailing the plight of every legacy automaker these days.
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