Volkswagen Is Planning Huge Expansion In Its Battery Making Capacity

With the aim of becoming the global leader in the electric vehicle segment, the German auto giant and the second largest car maker of the world Volkswagen has unveiled a massive expansion of battery production.

By 2030, plans of building six “gigafactories” in Europe was announced by the German car maker, and added that it will increase the production capacity of the company to 240 gigawatt hours per year. According to a spokesperson of the company, that power would be enough to run almost 4 million Volkswagen ID.3 electric vehicles. The first two battery factories will operate in Skellefteå, Sweden and Salzgitter, Germany, the company said.

The company announced at an event on Monday that it would also be adding a very large number of new electric vehicle charging points to its existing networks in Europe, the United States and China.

It is critical for Volkswagen to be able to significantly bring down the cost of battery systems down the cost of battery systems for success of its electric vehicle strategy. This new battery set will be launched by the company in 2023 and would be fitted in up to 80 per cent of the electric vehicles manufactured by the group. As much as 95 per cent of the raw materials involved in battery production will also be reused by the company.

“The one size fits almost all cell design will radically reduce battery costs … by up to 50% compared to today,” CEO Herbert Diess said at Monday’s event. “Lower prices for batteries means more affordable cars, which makes electric vehicles more attractive for customers.”

Volkswagen said in a statement that the costs of battery in electric vehicles, which accounts for a large proportion of the total cost of EVs, will be gradually reduced by up to 50 per cent for entry level models and by up to 30 per cent for standard models.

And as the company ramps up electric vehicle production, it will also need a secure supply of battery cells.

In its target of become the largest maker of battery electric vehicles of the world, Volkswagen is slowly catching up on United States based Tesla. In 2020, the German company managed to sell 231,600 battery electric vehicles which was about 50 per cent of the total number of vehicles sold by Tesla but it was also an increase of 214 per cent compared to the previous year.

“E-mobility has become core business for us,” Diess said. The company’s new strategy would secure “a long-term pole position in the race for the best battery and best customer experience in the age of zero emission mobility,” he added.

A large expansion of Volkswagen’s charging network is also on the cards for the company.

The company has set a target to operate about 18,000 public charging points in Europe by 2025 in partnership with BP, Spain’s Iberdrola and Italian energy company Enel, compared to the 3,600 that it operates currently. By that time, the total charger station network of the company will be about one third of the total demand at that time, the company said.

(Adapted from CNN.com)



Categories: Economy & Finance, Strategy, Sustainability, Uncategorized

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