*
VW investing up to 15 bln euros in batteries, raw
materials
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Two-thirds of 5-yr budget for electrification,
digitalisation
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Software unit Cariad saw 2.1 bln euro operating loss in
2022
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Car maker to present results of mock listing exercise for
brands
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Shares down 2.6%
(Adds detail from analyst call)
By Victoria Waldersee
BERLIN, March 14 (Reuters) - Volkswagen plans to invest 180 billion euros ($193 billion) over five years
in areas including battery production and raw material sourcing
in a bid to cut electric vehicle costs and protect its market
share, it said on Tuesday.
Over two-thirds of the company's five-year investment budget
announced on Tuesday is allocated to electrification and
digitalisation, including up to 15 billion for batteries and raw
materials.
With markets in turmoil over the collapse of Silicon Valley
Bank, Chief Financial Officer Arno Antlitz told analysts however
that the company could postpone some battery investments if the
market did not grow as expected.
"The overall target is having at all times solid
financials," Antlitz said.
Volkswagen, Europe's top carmaker, is striving to close a
gap with electric vehicle (EV) pioneer Tesla by
expanding its slice of the growing market for battery-powered
cars.
The carmaker is still aiming to bring an affordable EV -
costing around 25,000 euros ($26,795) at today's prices - to
market by 2025, produced on a second-generation version of its
all-electric MEB platform.
Antlitz said he hoped the company would by then have struck
enough raw material sourcing deals and expanded battery
production to bring down EV costs, 40% of which stem from the
cost of the battery.
"We expect to reach 20% electromobility in new sales from 2025 and are already investing two-thirds in that area," Antlitz said. "On the other hand we need to keep combustion engines competitive... that is a double burden." The carmaker said it is finalising high-performance software for its premium and luxury brands which could in the medium term be applied across the company, in an attempt to improve operations at its software unit Cariad. The unit set up under former CEO Herbert Diess has gone over budget and fallen behind on its goals, suffering an operating loss of 2.1 billion euros in 2022 on revenue of 800 million euros, according to the carmaker's annual report released on Tuesday. Shares in Volkswagen were 2.6% lower by 1122 GMT on Tuesday, with analysts at Jefferies describing the detailed final fourth-quarter results as "weak". Volkswagen met analysts' expectations in 2022 on revenues but missed the consensus estimate for earnings before interest and taxes by 3%. The investment decisions are targeted towards fulfilling a 10-point plan developed by Volkswagen CEO Oliver Blume after he took the helm in September. Board member Thomas Schmall said on Monday the carmaker's needs were covered in Europe by the three plants already in the works, and that it was in no rush to pick new sites. It also announced its first North American plant in Canada, due to start production in 2027. Volkswagen will share the results of a 'virtual equity story' exercise instigated by Blume, which had all of the company's brands from Audi to Bentley prepare for a listing as a training exercise, at a capital markets day on June 21.
The most likely actual stock market candidate is battery unit PowerCo.
All brands had already set profitability and cash flow targets at a summit in January, Blume said, without sharing what these were.
The carmaker this month issued an optimistic outlook for the year ahead that sent shares soaring, forecasting a 10% to 15% rise in revenue on 14% higher deliveries. ($1 = 0.9338 euros) <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ VW outperforms EU rivals ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Victoria Waldersee; Additional reporting by Christoph Steitz; Editing by Rachel More, Jamie Freed, Muralikumar Anantharaman and Jan Harvey)
