- Supervisory Board approves just under a billion investment for battery factory
- Volkswagen wants to become a technology and cost leader
- Raw material protection as a success factor
- Know-how construction with strong partners – the European Battery Union
The Volkswagen Group drives the basic system change in individual mobility continues to progress and is consistently based on the electric drive. Over the next ten years, almost 70 new electrical models should come on the market. The number of configuration vehicles on the E-platforms of the Group is 22 million pieces.
This increases the battery requirement of the Volkswagen Group alone in Europe and in Asia on more than 300GWh annually. Today’s cell capacities do not cover what the market will need in the future.
As the sales figures of electric cars are still manageable, the battery cells were imported mainly from Asia in the past. First battery factories in Europe are now at the start of being able to supply the vehicle volume of the coming years.
But as soon as the E-offensive of the VW Group has started driving, the regional production of batteries from competitive perspective makes sense, so the car concerts in a recent communication. Therefore, the Group Battery Strategy is an integral part of Volkswagen’s electrification strategy.
Supervisory Board approves just under a billion investment for battery factory
The Volkswagen Group will promote the construction of a battery cell production in the context of a partnership in Europe as part of its electrical offensive. In addition, the Supervisory Board has granted an investment volume of just under a billion euros in a recent meeting.
It is planned to settle such battery cell production in Lower Saxony, provided that the economic conditions are given for this purpose. These include, in particular, the exemption from the EEG surcharge and at the same time the availability of electricity from renewable energy sources. Probably until the end of the year, the plans and the concretization of investment finals should be decided.
Volkswagen pursues a multi-stage approach of competence construction in the battery
In the first step, strategic partnerships with the established cell suppliers are a crucial basis for supplying the batteries for the vehicles as part of the electrification offensive. These are long-term partnerships that ensure much of the supply of the appropriate technologies’ leaps sustainably. As the main supplier, Ski, LG Chem and Catl were defined for the first wave of electromobility.
In addition, it is about creating significational know-how in research, development and production of lithium-ion batteries. In Salzgitter Center of Excellence (COE), the Group has bundled responsibility for development, procurement and quality assurance of all battery cells for the Group. From the second half of 2019, the Group starts a pilot production at the location.
Due to the capital intensity in the investment in cell production, so-called Gigafactories with partners should be built as next time, which focuses on possible locations in Germany.
In the following phase, the Group plans to build cell production for lithium ions and cell production for solid batteries – both in Europe. Partnership with the US company QuantumScape is an integral part of the Group battery strategy, especially against the background of cell production for solids batteries.
Volkswagen wants to become a technology and cost leader
The battery will make up a significant part of the value creation for E vehicles. That is why the Group is working hard on the fact that the battery and battery cell will be another core competence of Volkswagen in the future – across all stages of the process chain, from development through production to disposal or. recycling.
For Volkswagen, it is clear that the technology and cost leadership is sought in this field. The Group wool customers not only offer the best e-vehicles, but also at competitive prices.
Raw material protection as a success factor
An important success factor is also the commodity protection. In the topic, the Group was well positioned. From today’s perspective, Volkswagen is confident that the company will have sufficient quantity over all the required raw materials for the startup of electromobility.
For lithium, the essential part of a battery, the Group recently completed a Memorandum of Understanding with Ganfeng for a 10-year contract. This agreement alone secures VW a significant share of lithium demand. Running further negotiations with other providers.
Meanwhile, the Group is consistently working to reduce the proportion of cobalt in the batteries – which would simultaneously reduce the necessary procurement volumes of this raw material. The proportion of this raw material is expected to decline from currently twelve to 14 percent (weight percentage in the cathode) to five percent within the next three to five years. Volkswagen is working to develop cobalt-free battery cells.
Know-how construction with strong partners – the European Battery Union
The Volkswagen Group has joined forces with other European partners on the “European Battery Union” (EBU) to advance battery research throughout Europe. Under the leadership of the Volkswagen Group and the Swedish battery manufacturer Northvolt, the common research activities will focus on the entire value chain of the battery – from raw materials to cell technology to recycling. The primary objective is a much more comprehensive competence building for the industrialization of battery cell production. The start of the joint research activities should be early 2020.
It is planned to settle a battery cell production in Germany (Lower Saxony), provided that the economic conditions are given for this purpose. Decisive criteria in the field selection are competitive tax framework conditions and – because of high electricity requirements for cell production – attractive energy prices. And last but not least: the tempo in the approval procedures, as the construction of a cell factory lasts at least three years.
Screws there are some to increase the attractiveness of potential German locations. Be conceivable, for example, exemption from the EEG surcharge, assistance in the granting of investment aids and infrastructure measures, as well as measures such as the granting of special write-offs or tax benefits, and last but not least a state promotion of training or. Retraining in the relevant region.
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