Volkswagen to Invest 1 Billion Euros in Artificial Intelligence, Focusing on Three Key Areas

On Tuesday local time, German automaker Volkswagen announced that it will invest up to 1 billion euros (approximately 1.2 billion US dollars) in the field of artificial intelligence (AI) by 2030, and will fully integrate this technology into all aspects of its business, aiming to unlock cost savings worth several billion euros.

This news was released on the first day of the Munich International Motor Show. As the largest auto show in Europe, this year European car manufacturers are actively launching electric vehicle models and technological upgrades to cope with intense competition from foreign carmakers.

Volkswagen stated that the related investments will be used for AI-supported automotive research and development, industrial applications, and the expansion of high-performance IT infrastructure. Volkswagen expects that by 2035, the application of AI technology will generate efficiency improvements and cost optimization benefits worth up to 4 billion euros.

Volkswagen Group’s Chief Information Officer Hauke Stars stated bluntly: “For us, artificial intelligence is the key to increasing speed, quality, and competitiveness—across the entire value chain, from research and development to production.”

Last Sunday, Volkswagen gave an early "spoiler" of its all-new entry-level pure electric SUV concept car, the ID. CROSS, which is positioned as an affordable electric vehicle and is seen as a key strategy for its development in the two core markets of China and Germany. Currently, Volkswagen is simultaneously advancing the reshaping of its model lineup and cost reduction in both China and Germany, with its German plants having already initiated a deep slimming plan.

Volkswagen has pointed out that artificial intelligence will significantly accelerate the development process of new models and technologies. This initiative highlights Volkswagen's attempt to leverage emerging technologies not only to advance its electrification strategy but also to consolidate its industry position amid changing global market dynamics and intensified competition.

The previous day, Volkswagen CEO Oliver Blume stated: "Volkswagen has been working hard over the past few years to improve software and optimize battery solutions. The newly released models will be the first to introduce our self-developed Unified Cell battery technology."

He added, "We are competitive. Currently, in the European electric mobility market, our market share has reached 28%, firmly holding the first position. This series of new vehicles will further expand our market share."

Blume revealed that the starting price of the ID. Cross is approximately 25,000 euros, directly entering the "red ocean range" with the slimmest profit margins among Central European brands.

When discussing the strong competition from Chinese electric vehicle companies, Blume expressed a welcoming attitude towards the challenge. "Competition is positive for me, just like in sports: the stronger the opponents, the better I must become. This is exactly the effort we have been making over the past few years—constantly improving ourselves."

Currently, the European automotive industry is facing multiple challenges: rising production costs, increased tariffs imposed by the United States, as well as supply chain disruptions and regulatory pressures.

Blume welcomed the recent trade breakthrough between the US and Europe, with the agreement expected to reduce US import tariffs on European cars from 27.5% to 15%. However, Blume believes that even the new tariff level remains a burden for businesses. He emphasized that Volkswagen will continue to maintain large-scale investment in the US market.