Volkswagen Drives Into The Future

Volkswagen Future

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What's going on?

Volkswagen (VW), the embattled German automaker, outlined its overall strategy up until 2025 on Thursday – and it relies heavily on electric vehicles!

What does this mean?

VW suffered some reputational damage last year as a result of its emissions cheating scandal. Thursday’s strategy briefing was an attempt by the company to show investors what its future will look like. Part of the new game plan is to make the company more profitable, i.e. to make more money for each car it sells – and it’s expecting electric cars to help.

Why should I care?

For the stock: VW will cut costs – but spend money acquiring and investing in outside innovation. VW has traditionally done a lot of its technological development in-house, but at Thursday’s strategy session, it said it will likely step up acquisitions of companies with innovative technologies. It will also invest more “venture” money in smaller companies in an attempt to develop new tech. At the same time, it will cut costs internally, including putting stricter limits on its internal Research and Development (R&D) spending.

The bigger picture: The mobility space has seen a lot of activity lately. In May, VW invested $300m into Uber rival Gett, and a few days later Uber raised $3.5bn from Saudi Arabia. Uber’s Chinese rival, Didi, also raised over $7 billion in funding. Meanwhile, Toyota announced that it would like to sell more electricity-powered cars. And Elon Musk estimated that Apple will have a car ready by 2020. Oh yeh, Google’s Larry Page also presented his flying cars. To put it in startup language: mobility really seems ripe for disruption…

Originally posted as part of the Finimize daily email.

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