BERLIN -- Volkswagen Group plans to invest billions of euros through 2022 to strengthen its portfolio of combustion engines and electric drivetrains as it braces for a further tightening of emissions rules in key markets.
VW will spend about 10 billion euros ($11 billion) over the next five years to raise the fuel efficiency of combustion engines by 10 percent to 15 percent in anticipation of stricter emissions standards in Europe, the U.S. and China, CEO Matthias Mueller said on Friday.
VW will also triple its investment in electric drivetrains to about 9 billion euros over the same period, including a new generation of full hybrids for the U.S., where its emissions scandal broke in 2015.
VW has spent 3 billion euros on zero-emissions technology in the past five years.
"Even though modern combustion engines will be relevant for at least another 20 years, it is clear that the future will be ruled by electric drives," Mueller said, citing a need to respond to "epochal changes" in industry.
"What's at stake is to develop a future-proof drives portfolio as a basis for transforming the core autos business," Mueller told an auto industry conference in Vienna.
VW's diesel emissions scandal has cast a shadow over the entire market for diesel cars and has ramped up pressure on automakers to improve combustion engines while rushing into electric cars and hybrids, stretching development budgets.
To rein in costs, Mueller said VW will reduce the variety of engine types for mass-market models by as much as 40 percent through 2020, without giving details
VW last year announced a multi-billion-euro shift to embrace electric cars and new mobility services as it battles to overcome its diesel scandal, and the automaker is cutting costs in all areas of operations to fund this transformation.