BERLIN -- Volkswagen Group is boosting spending on technologies for electric and self driving cars, while increasing production of EVs in its German home market.
Investments in battery-powered vehicles, autonomous driving and related future technologies will rise to about 73 billion euros ($86 billion), or half the company's 150-billion euro budget through 2025, VW said in a statement.
That's up from 60 billion euros ($71 billion) a year ago, or 40 percent of investments planned at the time.
The investment is part of VW Group's new five-year planning cycle, approved by the supervisory board on Friday.
The spending increase is based on the expectation that the global economy will grow moderately over the next five years, VW said.
The investment envisages production of about 26 million full-electric cars in Europe, China and the U.S. by 2030.
Some 19 million of these will be based on the automaker's Modular Electric Drive Toolkit (MEB), with most of the remaining seven million to use the high-performance PPE platform.
VW said it estimates production of around seven million hybrid vehicles over the same period.
Under the plan presented on Friday, VW is doubling its planned spending on digitalization to 27 billion euros ($32 billion), as it seeks to develop a seamless, software-based vehicle operating system.
This includes spending on the group's Car.Software organization launched earlier this year. The goal is to build a proprietary software stack, which will be deployed in Audi’s Artemis project to develop an advanced, self-driving electric vehicle by 2024.
The company's own share in software will increase to 60 percent from 10 percent, VW said.
In addition, a large share of the funds earmarked for digitalization will be invested in the mission-critical fields of artificial intelligence, autonomous driving and digitalization of significant business processes, the automaker said.
Jefferies analyst Philippe Houchois said while the overall investment budget had remained unchanged, VW's priorities had seen a "meaningful re-allocation to software and digitization and a continued priority on Germany."