(MENAFN) Volkswagen has announced plans to invest in mines to reduce the cost of battery cells and meet half of its own demand while selling to third-party customers. Thomas Schmall, the car maker’s board member in charge of technology, stated that Volkswagen’s battery unit PowerCo aims to become a global supplier, rather than just producing for Volkswagen’s needs. PowerCo will initially supply cells to Ford for the 1.2 million vehicles that the US carmaker is building in Europe on Volkswagen’s electric MEB platform.
In the long term, Volkswagen intends to build enough cells to meet half of its global battery needs, with most production capacity located in Europe and North America. According to Schmall, the bottleneck for raw materials is mining capacity, which is why Volkswagen plans to invest in mines directly. The carmaker has partnered with mining companies in Canada, where it will build its first North American battery plant. However, Schmall declined to comment on further locations or when Volkswagen might invest directly in mines, stating that the company would not disclose that information until the market was more settled.
Volkswagen’s strategy is to establish a select number of battery standards for the future. Through its large volume and third-party sales business, it aims to become one of those standards. Making or sourcing batteries at a reasonable cost is a significant challenge for car manufacturers like Volkswagen, Tesla, and Stellantis as they strive to make electric vehicles (EVs) more affordable.
According to a Reuters analysis, only Tesla has pledged more investment into battery production than Volkswagen, although even the US EV maker is struggling to increase production and is recruiting Asian suppliers to help. Volkswagen’s aim is for its battery unit PowerCo to become a global supplier of battery cells, not just to produce for Volkswagen’s needs. The company plans to build enough cells to meet half of its global battery needs, with most production capacity in Europe and North America. Its strategy is to establish a select number of battery standards for the future, and through its large volume and third-party sales business, it aims to become one of those standards.
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