Volkswagen CEO Matthias Mueller attends an event ahead of the Shanghai Auto Show, in Shanghai, China April 18, 2017. Picture taken April 18, 2017. REUTERS/Stringer

BERLIN (Reuters) - Volkswagen VOWG_p.DE said it plans to invest billions of euros through 2022 to beef up its portfolio of combustion and electric drives as it braces for a further tightening of emissions rules in key markets.

Europe’s biggest carmaker last year announced a multi-billion-euro shift to embrace electric cars and new mobility services as it battles to overcome its diesel emissions scandal, and the German group is cutting costs in all areas of operations to fund this transformation.

Volkswagen (VW) will spend about 10 billion euros ($11 billion) over the next five years to raise the fuel efficiency of combustion engines by 10 to 15 percent in anticipation of stricter emissions standards in Europe, the United States and China, Chief Executive Matthias Mueller said on Friday.

VW will also triple its investment in electric drives 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.

It 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 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.