FRANKFURT: Volkswagen is confident that cost cuts will help it raise profit margins in the coming years, the world’s second-largest carmaker said on Tuesday, a day after outlining an ambitious electric mobility expansion.

“Our good performance in 2020, a year dominated by crisis, will give us momentum for accelerating our transformation,” Chief Executive Herbert Diess said in a statement.

The comments come a day after Volkswagen unveiled plans to build half a dozen battery cell plants in Europe and expand infrastructure for charging electric vehicles globally, accelerating efforts to overtake Tesla.

Volkswagen said it aimed for an operating margin of 7%-8% in the years after 2021, not specifying an exact year, confirming it would end up at the upper end of a 5%-6.5% target corridor this year.

This will be achieved by 2 billion euros less fixed costs by 2023 compared with 2020, a decline of 5%, as well as a decline of 7% in materials costs over the same period, Volkswagen said.