Investment and financial planning
To meet people’s needs for individual, sustainable, fully connected mobility and thus increase the Volkswagen Group’s future viability, we continue to mobilize our strengths in innovation and technology and push Volkswagen’s transformation towards becoming a global automotive tech driver. We intend to unleash our full business potential through efficient portfolio management and by leveraging synergies within the Group.
In our current planning for 2025, most of the capex (investments in property, plant and equipment, investment property and intangible assets, excluding capitalized development costs) will be spent on the production of electric vehicles as well as on associated battery technologies, and electric toolkits and platforms as key components of the transformation within the mobility industry. Examples include the all-electric platform for our volume brands – the Modular Electric Drive Toolkit (MEB) and the Premium Platform Electric (PPE) for our vehicles in the premium and sports segment. Furthermore, we are currently concentrating our energies on designing the Scalable Systems Platform (SSP), the successor platform for our future all-electric vehicles. The strategic goals of this SSP platform are to further reduce variance by consistently enhancing synergies and thus tapping into considerable savings potential. Other focus areas of our capex are the digitalization of our products and sites, measures to cut carbon emissions, the promotion of sustainable production processes, and the expansion of our presence in markets such as North America (with the Scout brand) and China, where we will likewise step up our activities at local level.
Besides capex, investing activities also cover additions to capitalized development costs. Like capex, they reflect, among other things, upfront expenditures in connection with updating and electrifying the model range as well as for digitalization and technologies of the future. Additionally included are expenditures for the software architectures of the future, with a synergistic approach for use within the Group.
Through these investments in our facilities and models, as well as in the development of electrified drives, platforms and in digitalization, we are laying the foundation for profitable, sustainable growth at Volkswagen with a view to safeguarding our future viability. These investments also include commitments arising from decisions taken in previous fiscal years. In the Automotive Division, we are expecting an investment ratio of between 12% and 13% in 2025.
We aim to finance the investments in our Automotive Division from our own capital resources and expect cash flows from operating activities to exceed the Automotive Division’s investment requirements. We expect net cash flow for 2025 to be between €2 and €5 billion. This includes cash outflows for investments for the future as well as for restructuring measures. Net liquidity in the Automotive Division in 2025 is expected to be between €34 billion and €37 billion.
These plans are based on the Volkswagen Group’s current structures.
Our equity-accounted joint ventures in China are not included in the figures above. For 2025, these joint ventures plan to invest in e-mobility, further optimization of the model portfolio, the development of new mobility solutions and digitalization (especially in software). Their capex will probably exceed the 2024 level and be financed from the companies’ own funds.
In the Financial Services Division, we are planning lower investment in 2025 than in the previous year. We expect the development of lease assets and of receivables from leasing, customer and dealer financing to lead to funds tied up in working capital, of which around half will be financed from the gross cash flow. As is common in the sector, the remaining funding requirements will be met primarily through unsecured bonds on the money and capital markets, the issuing of asset-backed securities, customer deposits from the direct banking business, and through the use of international credit lines.