Volkswagen
2016 Volkswagen Beetle convertible/caranddriver.com

Germany Volkswagen expects to become the most profitable manufacturer of electric cars thanks to a multi-billion euro expansion plan to mass produce battery driven vehicles, Chief Executive Herbert Diess said on Friday.

VW will spend almost 44 billion euros ($50 billion) on developing electric cars, autonomous driving and new mobility services by 2023 and explore further areas of cooperation with U.S. automaker Ford.

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Diess said he hoped to have an outline agreement on cooperation with Ford fleshed out by the end of the year, with the initial focus on commercial vehicles. He added that a merger with Ford was not on the agenda and also said there were no plans to take a stake in the American company.

Mass producing electric cars will help the carmaker reduce the cost to the same level as current diesel vehicles, Diess said at a news conference in Wolfsburg, VW’s home town .

“Very emotional vehicles, high economies of scale, I think we will be the most profitable company in electric vehicles,” Diess said, responding to a question in English.

The supervisory board of Europe’s largest carmaker voted on far reaching capital spending plans to begin mass production of electric vehicles in Europe, the most radical strategy shift since VW’s diesel cheating scandal in 2015.

Volkswagen will retool three of its German plants to build electric cars and to explore alliances with battery partners and rival carmakers.

VW plans to increase productivity of its factories by 30 percent by 2025 by building more vehicles from different brands on the same production line. It wants to lower the carmaker’s research and development ratio at the group’s automotive division to six percent of revenues from 2020 onward.

“Volkswagen must become more efficient, more productive and more profitable in order to finance the high expenditure in the future and stay competitive,” Diess said.