A key goal is to improve margins at its mass-market VW brand, which is its largest division by sales but which has long lagged the profitability of rivals such as Japan's Toyota due in part to high labor costs at its German plants.
"By 2020 we will achieve 3 billion euros in cost savings, and now aim for a further 3 billion euros by 2023," Arno Antlitz, the board member responsible for finance at the VW brand, told a press conference in Wolfsburg, Germany.
That should help the brand reach a profit margin of at least 6 percent by 2022, three years earlier than previously planned, the company added.
Volkswagen said it aimed to reduce administrative expenses and achieve a "massive reduction" of complexity in the brand's model lineup even while adding EVs to it. Automotive News reported that in Europe, VW plans to do this by cutting 25 percent of its current engine-transmission variants, removing the ones that are in the least demand. It also wants to raise the productivity of its plants by about 30 percent by 2025.
The company did not give any details about job cuts, but ruled out forced redundancies. It said VW had started talks with labor leaders about the plan and discussions were constructive.
The VW brand aims to invest more than 11 billion euros in electric vehicles, digitalization, autonomous driving and mobility services by 2023, with the bulk earmarked for electric cars, the company said.
Volkswagen also said talks over a potential alliance with U.S. rival Ford were going well, and that it would give an update at the beginning of 2019. The firms are exploring areas of potential cooperation including electric and autonomous cars.
Shares in Volkswagen, which also makes Audi, Porsche, Skoda and Seat cars, were down 2.1 percent at 1120 GMT, in line with a European autos index hit by worries over a fresh build-up in the Sino-U.S. trade war.
Reporting by Jan Schwartz and Edward Taylor