In this Wednesday, Aug. 1, 2018 file photo, the logo of Volkswagen is seen on top of a company building in Wolfsburg, Germany. German automaker Volkswagen. says it will invest 44 billion euros ($50 billion) in developing autonomous and electric cars. (AP Photo/Michael Sohn, file) Volkswagen intends to invest 44 billion euros ($50 billion) in the electric and autonomous car technologies expected to reshape the industry—and said it would make battery-powered vehicles more accessible to mass-market auto buyers by selling its new I.D. compact for about what a Golf diesel costs.
The investment plans for the next five years aim to make Volkswagen "a worldwide supplier of sustainable mobility," Chairman Hans Dieter Poetsch said Friday. He added that the company is in talks with Ford about possible cooperation in making light commercial vehicles.
Established automakers are rolling out electric models to compete with Tesla , but also to meet new environmental standards.
In Europe, manufacturers need to sell more battery-powered cars to meet tougher EU limits on carbon dioxide emissions that come into force 2021 and aim to fight global warming. Automakers like Volkswagen, Daimler and BMW risk penalties of thousands of euros per vehicle if they can't meet requirements for lower average emissions.
Authorities in China, where Volkswagen gets much of its profit, have also mandated a bigger share of electrics and hybrids.
Yet right now, such vehicles remain a niche market due to higher price and lack of places to charge. Battery-only vehicles were only 0.6 percent of the market in the European Union last year. Major new models unveiled in recent weeks from Daimler's Mercedes-Benz and Volksagen's Audi brand have been expensive SUVs; Audi's e-tron starts at a German price of 80,000 euros. The starting price for Tesla's Model X is around $80,700 while the Model S is around $74,500.
Poetsch said the company's forthcoming I.D. compact would cost about what today's Golf diesel does. A base model diesel Golf is priced at 23,875 euros ($26,990) in Germany according to Volkswagen's website and goes up from there as optional features are added. The next model up the price scale starts at 30,625 euros.
Higher cost is one reason consumers are not yet buying purely electric vehicles in large numbers. The lack of charging points is another, leaving many owners of electric vehicles to use them mainly in cities or for short trips. Volkswagen and other automakers are working together on building a freeway network of fast-charging stations to enable longer trips with battery powered cars.
The shift to electric cars is a big one for a company the size of Volkswagen, which has over 600,000 employees and makes about 10 million vehicles a year.
It is converting three of its German plants from internal combustion to battery car production as it pivots away from diesel vehicles in the wake of its emissions scandal. It says it will increase the number of electric models from six now to more than 50 by 2025.
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