In its most significant move since its notorious diesel emission scandal, Volkswagen is vastly expanding its production of electric cars, according to Reuters. The company will spend nearly 44 billion euros ($50 billion) in a massive expansion of work on electric vehicle production and autonomous driving technology, and its collaboration with Ford on self-driving and electric cars.
Volkswagen chief Herbert Diess said they would initially cooperate with the US automaker in production of commercial vehicles, and was careful to say there were no plans for a merger with Ford.
Three of Volkswagen’s plants in Germany are set to be retooled to manufacture electric cars, and to host collaborations with battery partners and other automakers. The company is aiming to create production capacity for an additional 1 million electric vehicles by 2025.
The move towards mass production, by Europe’s largest automaker, will help bring the cost of electric cars down closer to that of diesel vehicles. The company is aiming to increase productivity of their factories 30 percent by 2025, by using the same production lines to manufacture more vehicles of different brands.
“Volkswagen must become more efficient, more productive and more profitable in order to finance the high expenditure in the future and stay competitive,” according to Diess.
Labor unions control half the seats on the company’s supervisory board, and will need to approve the plans, despite concerns that electric car production may not employ as many workers as conventional vehicle production. An electric car battery contains only 200 components, compared to the 1,400 in the motor of a combustion engine car.
The current plan offers job guarantees for workers until 2028.
The collaboration with Ford promises new possibilities for sport utility vehicles and trucks, according to Diess.
“Our two companies complement each other very well in terms of both products and regions. The joint development and manufacture of a range of light commercial vehicles is at the core of the envisaged cooperation,” he said.
Scot Keogh, chief of Volkswagen Group of America also said earlier this week that the company was scouting for a location in North America for a new electric vehicle plant.
“We are 100 percent deep in the process of ‘We will need an electric car plant in North America,’ and we’re holding those conversations now,” he said.
The news followed an announcement from General Motors this week saying the company will shut down five North American plants next year.