German Manager Magazine: Volkswagen: Thomas Schmall scales back plans for battery cell factories003521

The billion-dollar battery cell factories of Volkswagen will initially be designed to be smaller than originally planned due to the current lull in electric car sales. When building the factories, we will react “flexibly” to the sales figures for electric cars, said technical director Thomas Schmall (60) in a conversation with the “Frankfurter Allgemeine Sonntagszeitung” published in advance on Friday. “Our goal is still realistic, but it is not set in stone; building battery cell factories is not an end in itself.” The expansion of the plants will depend on how the market for electric cars develops.

The Volkswagen Group wants to build three of its own gigafactories so far. Cell production is scheduled to begin in Salzgitter in 2025, in Valencia in 2026 and in St. Thomas in Canada in 2027. Schmall said they are currently planning to have a capacity of up to 170 gigawatt hours at the three locations. If necessary, the locations in Valencia and Ontario could easily be expanded. The goal of 200 gigawatt hours is still realistic and feasible by 2030.

When Schmall announced the company’s intention to produce battery cells itself in 2021, he spoke of six plants by 2030. Volkswagen has now moved away from this anyway. In principle, however, Schmall believes that the chosen path is the right one. He said back in March in an interview with manager magazine 

: “The transformation in the auto industry is a huge challenge; there will always be minor delays and adjustments. The investments, including in battery technology, are very high, especially at the beginning. We shouldn’t make the mistake of questioning everything at the first headwind. That would be dangerous.”

Overall, the demand for electric cars in Europe is declining, among other things in countries such as Germany or Sweden, state funding for electric cars can no longer be applied for. In total, only 139,300 new electric vehicles were registered in July, which corresponds to a decline of 6 percent compared to the same month last year. The decline is particularly drastic in Germany: Here, new registrations of purely electric cars in July were almost 40 percent below the same month last year.

Of course, you can also feel this at Volkswagen. The small ID.3, the SUV called ID.4 or the ID.7 sedan are all below expectations. The electric bulli ID.Buzz, launched as a beacon of hope, made a false start 

. For Schmall, however, there is no alternative to electric shock.

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