People look at the Volkswagen id buzz electric car during press day at the Los Angeles Auto Show in Los Angeles, California, November 17, 2022.
Mike Blake | Reuters
volkswagen announced on Tuesday its intention to invest 180 billion euros ($192.6 billion) between 2023 and 2027, more than two-thirds of which will target “electrification and digitization”.
The German auto giant earlier this month released full-year 2022 operating profit of 22.5 billion euros, up 13% from a year earlier, with deliveries batteries and electric vehicles (BEV) up 26%.
BEV’s expansion was driven by a 68% spike in China, while the company also completed the historic electrification of its factory in Chattanooga, Tennessee.
However, the total number of deliveries decreased by 7% to 8.3 million vehicles in 2022 and the net cash flow of the automotive division decreased to 4.8 billion euros against 8.6 billion euros in 2021.
In Tuesday’s annual report, the company attributed this to “an increase in working capital due to supply chain and logistics issues, particularly towards the end of the year”, and forecast that this should “largely reverse” during 2023.
CEO Oliver Blume said Volkswagen “has set itself clear and ambitious goals and taken the necessary decisions to streamline processes” in 2022, while the coming year will be “decisive” for the execution of strategic objectives of the group.
Volkswagen Group CFO and COO Arno Antlitz said the company’s strong financial position should allow it to “continue to invest in electrification and digitalization” even in an “economic environment difficult”.
“We have interest rates going up and aggregate demand going down a bit from a customer perspective, from a market perspective, but on the other hand, we’re still operating in an environment, in an economy, that is characterized by [semiconductor] supply which is still not sufficient,” Antlitz told CNBC on Tuesday, adding that this global shortage of semiconductors is easing.
“Based on this, we have an order book of almost 1.8 million cars. Based on our strong products, strong brands and this order book, we are quite confident for 2023.”
The automotive division’s net cash flow reached 43 billion euros at the end of 2022, fueled by the success of the luxury brand’s IPO Porschewhich announced record profits on Monday and published an ambitious long-term outlook.
