Volkswagen will invest an additional €17bn in the development of electric vehicles and build more battery models at its high-cost German plants, as the carmaker seeks to mollify unions following public clashes with management.
The total spend on the electric transition will rise from €35bn to €52bn, the largest such investment by any traditional manufacturer. VW will also make its flagship battery model, the ID.3, at its home plant in Wolfsburg.
The announcements by VW’s supervisory board came after weeks of open warfare between chief executive Herbert Diess, who has long sought to slash the company’s cost base, and VW’s powerful works council, which represents most of the group’s 290,000 employees in Germany.
In a fraught meeting between workers and management last month, union leaders warned Diess that “a coach who no longer has access to the team loses on the pitch” after he had suggested that VW needed to shed 30,000 jobs.