VW to support battery suppliers with production setup
Volkswagen wants to use financial support and the establishment of joint ventures to persuade battery cell suppliers to produce sufficient energy storage systems for the Group’s electrical offensive at a faster pace. Many suppliers remain hesitant.
Some companies are apparently reluctant to invest in new plants, despite the large orders being made by the VW Group. A battery manufacturer has to do more convincing work than a pure automotive supplier in order to invest in the automotive industry. “Not every supplier is convinced that electric mobility will come on such a large scale,” said Stefan Sommer. “For this reason, Volkswagen is forced to make greater contributions to supporting its partners, for example by pre-financing production tools and by sharing the entrepreneurial risk in a joint venture.
When the joint venture with the Swedish company Northvolt was announced a few weeks ago, VW confirmed that it needed further suppliers to maintain its planned battery capacity. If the group follows its current electrification strategy, it will have an annual demand of over 150 GWh in Europe alone from 2025. Similarly, large quantities of battery cells will probably still be needed in Asia.
The battery cell production that Northvolt and Volkswagen are setting up in Salzgitter will initially be able to produce 16 GWh and build up to 24 GWh per year. VW also purchases battery cells from the Korean companies SK Innovation, LG Chem and Samsung SDI as well as CATL from China. The partnership with CATL is currently limited primarily to electric cars produced in China. With the planned plant in Erfurt, the Chinese group could also become a VW supplier in Europe.
At present, the trend is moving towards joint ventures in order to convince battery manufacturers, Sommer said. This will not only lower the investments of the companies involved: It has the advantage that Volkswagen gets an early insight into the production process when a new factory is built. “We have built up our own expertise, which we share with suppliers, which helps when we build a new plant. It gives us an early indication if there are teething problems”.
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