Volkswagen Group said Tuesday it plans to spend around €122.4 billion ($131.24 billion) on electrification and digitalisation over the next five years as it continues to develop its EV portfolio, Kallanish reports.

The allocation corresponds to 68% of the planned €180 billion investment budget, a share higher than the 56% in the previous five-year plan. The boost of up to €15 billion relates to its planned gigafactories and upfront expenditures for securing raw materials as part of the implementation of the battery strategy, the company explains.

The 2023-2027 investment plan will cover the group’s battery strategy led by its subsidiary PowerCo; its growing presence in North America; and increasing competitiveness in digitalisation and products in China through its software subsidiary CARIAD.

It’s unclear whether the investment includes the six gigafactories the company has planned in Europe by 2030. To date, PowerCo has confirmed two gigafactory projects in Europe (Germany and Spain) and one in Canada. According to VW Group, PowerCo is expected to generate annual sales of over €20 billion by 2030.

VW Group ceo Oliver Blume said during the company’s annual press conference that “FY 2023 will be a decisive year for executing strategic goals and accelerating progress across the group.”

It’s in this period that the group plans to launch five new BEV models (new VW ID.3, ID.7, ID. Buzz Long Wheel Base, Cupra Tavascan and Audi Q8 e-tron) and increase its BEV market share from 7% to 10%. From 2025, every fifth vehicle sold globally is expected to have an all-electric drive, the company says.

Volkswagen Group cfo Arno Antlitz said FY 2023 will be as challenging as the previous financial year, but the company is confident on the outlook and its ability to “generate robust returns.” The existing order book, of which 16% is for BEVs, is supporting the company’s optimism this year, he suggests.

BEV deliveries rose 26% in 2022 to 572,100 units. The group remained the BEV leader in Europe while increasing deliveries in China by 68% and in the US by 18.8%. The best-selling models within the group portfolio were the Volkswagen ID.4 (193,000 units), the ID.3 (76,600 units) and the Škoda Enyaq (53,700 units).

Blume reiterated that BEV expansion in other geographies will happen gradually.