Volkswagen AG announced this week that it will spend more than $55 billion over the next four years reducing carbon emissions from both its vehicles and factories, as the German automaker looks to increase sales by boosting its credibility as an environmentally friendly vehicle maker. You can see the beginnings of this plan in the company's Chattanooga plant, which we visited late last year.

VW said that "well over two thirds" of the 62.4 billion euros ($82.5 billion U.S. at current exchange rates) it will invest through 2016 will be earmarked towards making more fuel-efficient vehicles as well as more ecologically friendly factories worldwide. The company, which unveiled its plan at the Geneva Motor Show this week, estimated that its 2015 model-year vehicles will, on average, have 30 percent lower emissions than the 2006 model-year vehicles, and that each new generation of a model will boost fuel efficiency by at least 10 percent compared to the previous version.

In addition to vehicle improvements, VW wants to cut factory-generated greenhouse-gas emissions by 40 percent by the end of the decade, and will invest about $800 million on renewable-energy sources like wind, solar and hydroelectric.

Volkswagen made the announcement as it starts sales if its Up! supermini vehicle in Europe, and is showing off four variations of that model in Geneva this week. The automaker hasn't announced any plans to sell the model in the U.S. Last month, VW started testing a battery-electric version of its Golf hatchback in the San Francisco Bay Area while announcing plans to sell a Golf plug-in hybrid in 2015. VW will unveil a Golf PHEV concept vehicle at the Paris Motor Show this September, according to Plug In Cars.

For the 2010 model year, the most recent year the U.S. Environmental Protection Agency (EPA) has released fleetwide fuel-economy statistics for, VW's U.S. fleet averaged 24.6 miles per gallon, the third-best among the 14 largest vehicle makers in the U.S. market.


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Volkswagen Group gives go-ahead for fundamental ecological restructuring

• Ambitious new sustainability targets
• 30 percent reduction in CO2 emissions during period from 2006 to 2015
• More than two thirds of €62.4 billion investment program for period to 2016 earmarked for ever more efficient vehicles, powertrains and technologies as well as environmentally compatible production

Wolfsburg/Geneva, March 5, 2012 – The Volkswagen Group is raising the bar for environmental protection higher and has set itself ambitious new sustainability targets. In light of this, the Group will be spending well over two thirds of its entire €62.4 billion investment program for the coming five years directly or indirectly in ever more efficient vehicles, new powertrains and technologies as well as environmentally compatible production at its plants all over the world.

"Geneva 2012 marks the start of a fundamental ecological restructuring of the Volkswagen Group", Prof. Dr. Martin Winterkorn, Chairman of the Volkswagen Group Board of Management, announced on Monday on the eve of the Geneva International Motor Show. "Our declared goal is to make Volkswagen the leading automaker in ecological terms, too."

Volkswagen stands for responsible conduct towards employees, society and the environment. "That is the fundamental element and core of our Strategy 2018. To take pole position and to sustain that lead over the long term, you have to understand all these dimensions of our business and to practice them convincingly at every level," Winterkorn said, and continued: "We are raising the bar much higher when it comes to sustainability." In this context, he stated that the Group would be reducing CO2 emissions by its European new vehicle fleet by some 30 percent during the period 2006 to 2015. "As a result, emissions by the Volkswagen Group fleet in 2015 will be below the important threshold of 120 grams CO2 per kilometer for the first time," Winterkorn announced. He went on to say that every new model generation would on average be 10 to 15 percent more efficient than its predecessor.

Modular Transverse Toolkit: Efficiency technologies available as standard in all new models
According to Winterkorn, the "Modular Transverse Toolkit" (MQB) would make significant improvements in efficiency and alternative powertrain technologies accessible across all brands and segments. "Based on the MQB, the Volkswagen Group's efficiency technologies will be available as standard in all new models over the coming years. The next big milestones this year are the Audi A3 and our best-selling model, the Golf", Winterkorn said.

He declared 2013 the "year of e-mobility" for Volkswagen, starting with the e-up!, which would then be followed by further all-electric or partially-electric vehicles from many Group brands.

25 percent improvement in environmental compatibility of production
Sustainable production and sustainable energy resources represent a further focus of the multi-billion investment program. According to Winterkorn: "Volkswagen is not only working on developing the most environmentally-friendly vehicles, but also on building them with the greatest possible sustainability. That is why we have set ourselves the target of making production in the Volkswagen Group 25 percent more environmentally compatible by 2018."
He also announced that the Group was aiming for a 40 percent reduction in greenhouse gas emissions associated with production-related energy supplies by 2020: "To that end, we will be investing some €600 million in expanding the use of renewable energies such as wind, solar and hydroelectric power."

Overview of the Volkswagen Group's targets:
The Volkswagen Group will be investing €62.4 billion worldwide plus an additional €14 billion in China during the period to 2016. Well over two thirds of this investment program will be spent directly or indirectly on ever more efficient vehicles, powertrains and technologies as well as environmentally compatible production at Group plants.

CO2 emissions by the European new vehicle fleet will be reduced by some 30 percent during the period from 2006 to 2015 – emissions will be below the threshold of
120 grams CO2/km for the first time by 2015.

Every new model generation will on average be 10 to 15 percent more efficient than its predecessor.

There is to be a 25 percent improvement in the environmental compatibility of production in the Volkswagen Group by 2018. In specific terms, that means 25 percent less energy and water consumption, waste and emissions.

40 percent reduction in greenhouse gas emissions associated with production-related energy supplies by 2020.

To that end, some €600 million is to be invested in expanding the use of renewable energies such as wind, solar and hydroelectric power.