CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

VW to cut jobs as electric car plans speed up

Volkswagen announced that it will make job cuts as it accelerates its manufacturing of less labour-intensive electric cars amid a challenging market that is applying pressure on profit margins.

Volkswagen warned that it will have to make job cuts as it accelerates the manufacturing of less-labour-intensive electric cars in the coming years in a move that will help the carmaker offset sliding profit margins brought on by a myriad of headwinds.

On Tuesday, the German carmaker said that it plans to produce around 70 new electric models by 2028 – instead of the 50 it previously planned – with the group looking to be completely a carbon neutral business by 2050.

‘Volkswagen will change radically,’ Volkswagen CEO Herbert Diess said. ‘We are taking on responsibility with regard to the key trends of the future – particularly in connection with climate protection.’

VW aims to put diesel emissions scandal in rearview mirror

The carmaker is looking to put itself at the forefront of the industry’s shift to zero-emissions in the wake of its 2015 scandal that saw the company forced to pay US authorities $2.8 billion in fines for rigging its diesel-powered vehicles with a cheat device to circumvent emissions tests.

‘The targets of the Paris Agreement are our yardstick,’ Diess said. ‘That is how we will be making our contribution towards limiting global warming.’

However, the company admitted that in order to bear the level of investment needed for it its ‘electric offensive’ it is forced to make improvements in efficiency and performance across the group.

VW must get lean to achieve green future

Investments made at its factories to retool them in preperation for the company's electric makeover, combined with currency fluctuations and an industry slowdown in sales led to a decline in profit margins across its VW, Skoda, Audi and Porsche brands in 2018.

Declining margins forced the company to align executive pay and bonuses more closely to profitability and will see the carmaker reduce it headcount across the group as the business moves closer to an electrically driven future.

‘The reality is that building an electric car involves some 30% less effort than one powered by an internal combustion engine,’ Diess added. ‘That means we need to make job cuts.’


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