Volkswagen to deepen alliances with battery suppliers

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Volkswagen is going to create joint ventures and help finance battery production to persuade skeptical cell providers to back its aggressive push for mass-producing electric vehicles, board member Stefan Sommer informed Reuters.

VW has stated it will purchase 50 billion euros ($56.57 billion) worth of battery cells and has identified Sweden’s Northvolt, South Korea’s SKI, LG Chem and Samsung SDI along with China’s CATL as strategic partners.

“Not every supplier is convinced that electric mobility will come on such a large scale. You need to put more time convincing them to invest in the auto industry,” Sommer informed Reuters.

Volkswagen stated that by 2025, it needs 150 gigawatt-hours worth of battery production capacity in Europe and about 150 more in Asia. By 2030 this amount will double.

“These producers need to prioritize between making a new smartphone or building a new battery factory. So even the battery cell producers are asking: will production volumes scale up quickly?,” he stated.

The German automaker is retooling 16 factories to build electric vehicles and prepares to start producing 33 different electric cars under the Skoda, Audi, VW and Seat brands by mid-2023.

Consumers have been slow to embrace electric vehicles in huge numbers because of the limited operating range and long battery recharging times, and due to a lack of charging infrastructure. This has spooked potential providers.

“When it comes to normal components, suppliers have the opportunity to sell to other automakers, if VW buys less. But with electromobility we all know: if it does not work for VW, then it won’t work for others,” he stated.


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