Volkswagen invests in key plant for electric era

German auto giant Volkswagen unveiled Wednesday a major investment to convert the main factory at its headquarters to electric car production, although the future of a planned new plant remained unclear.

The legacy automaker has in recent years launched a shift towards electric vehicles, seeking to boost its green credentials and turn the page on the “dieselgate” emissions-cheating scandal.

The 460-million-euro ($485 million) investment by 2025 at the HQ in Wolfsburg, northern Germany, will help transform the plant into a “highly productive e-mobility factory”, Volkswagen said.

It will focus initially on the ID.3, a compact electric car already on the market, with production set to begin next year.

Earlier this year, Volkswagen unveiled plans to invest two billion euros in a new plant close to Wolfsburg for production of “Trinity” vehicles, the centrepiece of its new all-electric fleet.

But reports emerged last month that the carmaker is considering pulling plans for the factory.

Software problems could delay the start of production, allowing time for the existing plant to be upgraded and making a purpose-built new site unnecessary.

In Wednesday’s statement, Volkswagen said a decision on where the Trinity will be built “has not yet been taken” but added that the company was “keeping the option to build a new factory… open”.

Volkswagen has been reassessing its electric strategy since Oliver Blume took over as CEO in September.

The company’s former boss, Herbert Diess, had launched the move away from combustion engines in earnest.

But his hard-driving style and praise for US rival Tesla ruffled feathers internally, and he finally left as problems mounted in the group’s software division. (AFP)

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