Tag: VW

Despite its plans to become the biggest EV-maker in the world by 2023, Volkswagen says it won't be affected by the tightening battery supplies that have roiled the industry, including Audi, the company's Volkswagen Group partner.

VW plans to build up to 3 million all-electric vehicles a year by 2025 and plans to produce 22 million EVs in total by 2027. It has secured $50 billion in battery contracts with Korea's LG Chem, Samsung, and SK Innovation, as well as China's CATL for battery supplies. VW also invested 1 billion euros in Swedish startup battery supplier Northvolt, which plans to build the largest battery factory in Europe.

“I can confirm that for the first years of our plan, a sufficient supply of cells has been contractually secured,” said Thomas Ulbrich, VW board member in charge of electric mobility. “We have the contracts so no one is going to stand there and tell us 'we are not going to supply you any more,'” he told Automotive News Europe (subscription required.) He confirmed that plan runs through 2023.

After that, he said, “You will likely see us permanently in negotiations for cells for the next three to five years.”

In May, Bloomberg reported that Samsung cut its supply agreement with Volkswagen over disagreements about timing.

As automakers around the world ramp up their production of electric cars, mining for battery chemicals has not kept pace. And Volkswagen, as one of the world's largest automakers making the transition from building gasoline and diesel cars to focusing on electrics, has become ground zero for concerns over battery supplies. Volkswagen's plans alone call for more than 300 gigawatt-hours of battery capacity over the next 10 years, which outstrips the total global supply.

Volkswagen ID Vizzion Concept

Hyundai has expressed concern over battery supplies as waiting lists for its Kona Electric stretched for over a year in Europe due to battery shortages.

Tesla, too has said that supplies of raw materials for batteries are one of its major concerns for the future, and has said that production constraints from its battery supplier, Panasonic, have held up production of its mass-market Model 3.

The U.S. has put battery materials such as lithium and cobalt on its list of critical minerals to be developed in the U.S. to shield the country from competitive supply concerns.

Ulbrich took one parting shot at battery suppliers in his comments about Volkswagen supplies. “They probably hoped to maintain an oligopoly for a very long time,” Ulbrich said. “That's not possible.”