Audi plans to invest around 12 billion euros in electric mobility by 2024. The Ingolstadt-based company has set itself this goal of increasing upfront expenditure in this area in their new planning round.
As already announced in May, the Audi Group plans to have 30 electrified models on offer by 2025, 20 of them purely electric. Audi is planning to put a total of approximately 37 billion euros over into research & development as well as investments in property, plant and equipment the next five years.
“With our Consistently Audi strategy, we are accelerating our roadmap towards electrification. Our investment planning takes this into account,” says Alexander Seitz, Board of Management Member for Finance, China and Legal Affairs at AUDI AG. “At around €12 billion, we will spend more than ever before on electric mobility by 2024.”
These investments are just part of the VW Group’s Planning Round 68, which decided in mid-November to pump 33 billion euros into e-mobility by 2024. These plans will see the Group increase the investments planned for 2020 to 2024 by 10%, which is almost 60 billion euros to spend on electromobility, hybridisation and digitisation during this period.
The increase in investment in electromobility cannot, however, conceal the fact that Audi is cutting overall expenditure. While Audi is planning a total of approximately 37 billion euros over the next five years, in the last five-year plan from 2019 to 2023, Audi budgeted 40 billion euros. The current planning reflects better investment and “spending discipline”, Audi says.
The company’s current budget plans primarily affect the German company’s workforce and the plants. The agreement in principle reached a few days ago with employee representatives involves cutting 9,500 jobs by 2025 – in return, 2,000 new jobs will be created, most of these in the field of electric mobility.
It seems that the company is adjusting to the drop in overall car sales from its most familiar markets. The production capacity of the two German plants in Ingolstadt and Neckarsulm will be reduced by around a fourfold to 450,000 and 225,000 cars respectively – in the end, only two-thirds of the plants were being used to capacity.
Thanks to the cost-cutting measures, Audi expects a positive earnings effect totalling around six billion euros by 2029.
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