Volkswagen announces massive investment in electric mobility

German car maker Volkswagen (VW) announced at the Frankfurt International Motor Show (IAA) on Monday that it would invest billions of euros in electric mobility.

There has been mounting pressure on Germany's automotive industry to re-invent itself in the wake of the diesel emission and cartel scandals.

"We have understood and we will deliver," VW chief executive officer (CEO) Matthias Mueller said.

The world's largest car maker by sales plans to invest a total of 20 billion euros (24 billion U.S. dollars) until 2030 in electric mobility and even 50 billion euros in batteries. The declared aim is for everyone of VW's roughly 300 models to be globally available in an electric version by that date.

Mueller further announced that he would roll out 50 new electric vehicles and 30 new plug-in hybrids within the next eight years. That way, every fourth VW vehicle would be exclusively battery-powered by 2025, while 75 percent of its fleet would still be made up of traditional combustion engines.

Among the new electric models presented is the so-called "I.D.", which is designed to compete with the Tesla Model 3, the least expensive car (35,000 U.S. dollars) currently offered by the U.S electric car maker.

According to Mueller, the automotive industry is undergoing an irreversible process of transformation. VW was taking up the challenge by developing new capacities to manufacture battery cells at its Salzgitter factory.

A battery capacity of at least 150 gigawatt hours per year will be required to power the electric fleet, which the company intends to assemble by 2025.

VW was not the only automotive giant to herald a re-orientation towards electric mobility at the auto show. Mercedes-Benz owner Daimler AG announced its goal to offer all its models with either electric or hybrid motors by 2022.

"We are planning for more than 50 variants of electrified vehicles," Daimler's chairman Dieter Zetsche told reporters. Additionally, Daimler's Smart car will become fully electric in Europe and the United States by 2020.

Despite these ambitious plans, it was too early to predict the end of combustion engines at Daimler, according to Zetsche.

"Combustion engines will remain the backbone of our CO2 goals as well as our financial performance over a considerable period of time," he said.

Speaking to Xinhua, a Daimler spokesperson further noted that diesel vehicles would continue to play a "significant" role in the company's portfolio until 2025. Daimler said it would roll out two new four and six-cylinder diesel motors until then.

According to the spokesperson, a lack of infrastructure such as battery-charging stations won't hamper Daimler's e-mobility drive as the company had already entered a joint venture with BMW, Ford and VW to construct 400 charging stations along key European travel routes.

German Chancellor Angela Merkel will formally open the Frankfurt IAA to the public on Thursday.