The Reuters report appeared the same day VW made the announcement.

Over two-thirds of the company's five-year investment budget is allocated to electrification and digitalisation, including up to 15 billion euros for batteries and raw materials.

With markets in turmoil over the collapse of Silicon Valley Bank, Chief Financial Officer, Arno Antlitz, told analysts that the company could, however, postpone some battery investments should the market not grow as expected.

"The overall target is having solid financials at all times," Antlitz said.

Volkswagen, Europe's top carmaker, is striving to close a gap with electric vehicle (EV) pioneer Tesla by expanding its slice of the growing market for battery-powered cars.

The carmaker is still aiming to bring an affordable EV – costing around 25,000 euros at today's prices – to market by 2025, produced on a second-generation version of its all-electric MEB platform.

Antlitz said he hoped the company would by then have struck enough raw material sourcing deals and expanded battery production to bring down EV costs, 40% of which stem from the cost of the battery.

"We expect to reach 20% electromobility in new sales from 2025 and are already investing two-thirds in that area," Antlitz said. "On the other hand we need to keep combustion engines competitive... that is a double burden."

The carmaker said it is finalising high-performance software for its premium and luxury brands, which could in the medium term be applied across the company, in an attempt to improve operations at its software unit, Cariad.

The unit set up under former CEO Herbert Diess has gone over budget and fallen behind on its goals, suffering an operating loss of 2.1 billion euros in 2022 on revenue of 800 million euros, according to the carmaker's annual report released on Tuesday.

(1.00000 EUR = 19.45510 ZAR on 16 March 2023)