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On Tuesday 16 March, Volkswagen’share price jumped by more than 9%, bringing its market value to 150 billion dollars. This was due to the details revealed by the car manufacturer concerning its ambitious expansion into electric driving.
A day after unveiling plans to invest $30 billion by 2030 in battery factories alone, with tens of billions more to be invested in a range of new models, the German company has said it aims to more than double deliveries of electric vehicles this year.
Volkswagen wants to sell 26 million electric cars by 2030.
“Our good performance in 2020, a year dominated by the crisis, will give us the impetus to accelerate our transformation,” Chief Executive Herbert Diess said in a statement.
At its annual press conference, the carmaker also reiterated its confidence that cost cuts would help boost profit margins in the years ahead.
He confirmed that he was targeting an operating margin of 7-8% by 2025, adding that he would probably end 2021 at the upper end of a target corridor of 5-6.5%.
Volkswagen’s target will be achieved by lowering fixed costs by €2bn by 2023 compared to 2020, a 5% drop, as well as a 7% drop in material costs over the same period, he said, without giving further details.
In addition, to better control its personnel costs, Volkswagen on Sunday offered early or partial retirement to its oldest employees, a move that sources said could cut up to 4,000 jobs at its German plants.
“We want to put the ambitious transformation of the Volkswagen group on a solid financial footing,” said new finance director Arno Antlitz.
On the IPO of the group’s Porsche luxury division, which the CEO is regularly asked about, he said there was no need to act immediately given the importance of Porsche in the group’s turnaround efforts.
“That’s why you have to think very, very hard about every step,” Diess said at the group’s annual press conference, adding that the carmaker’s goal was to finance its strategic shift with cash flow from existing businesses.
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Featured Photo : © Volkswagen[/vc_column_text][/vc_column][/vc_row]
