Volkswagen has reportedly reached a big milestone in battery costs that would heat up its competition with Tesla

Volkswagen has reached an important milestone in reducing the battery costs for its electric vehicles, according to a report from The New York Times.

An unnamed Volkswagen executive told the publication that the automaker pays less than $100 per kWh for its batteries, a landmark that has been cited as a possible inflection point that would allow for the mass adoption of electric vehicles.

Volkswagen did not immediately respond to Business Insider’s request for comment.

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The battery pack is the most expensive part of an electric vehicle, and battery costs are the biggest obstacle to driving electric-vehicle production costs down to a level that would allow automakers to sell them at affordable prices without hurting overall profit margins.

Tesla, which produces batteries with Panasonic at its Gigafactory in Nevada, has been seen as the leader in electric-vehicle battery technology and cost. In June 2018, its CEO Elon Musk, said the electric-car maker would possibly cross the $100-per-kWh threshold by the end of that year, but it has not disclosed since whether that has happened. In June of this year, Musk suggested that Tesla’s battery costs were lower than those of its competitors, but he did not specify the company’s cost per kWh.

Tesla did not immediately respond to a request for comment.

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Volkswagen’s reported claim about battery costs came just before it unveiled the production version of its ID.3 electric hatchback, the first vehicle to be produced by the company using a platform designed specifically for electric vehicles. The ID.3 will go on sale in Europe later this year, though Volkswagen has not said if it will sell the ID.3 in the US.

In the wake of its Dieselgate scandal, in which Volkswagen admitted in 2015 to installing software on around 11 million diesel-powered cars to cheat emissions tests, the company has set ambitious goals for electric-vehicle investment. Volkswagen said in March that it plans to invest over $30 billion in electric vehicles by 2023 and introduce nearly 70 new electric models by 2030.

Read The New York Times’ full story here »

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