Management officials at the Volkswagen automaker said this week that the automaker does not see the need to set up exactly six traction battery production companies in Europe if its needs are being met by a smaller number of manufacturing plants. At the same time, the overall productivity of European companies should remain at the level of 240 GWh per year.
Image source: Volkswagen
As explained Reuters Referring to Volkswagen board member Thomas Schmall, the automaker’s traction battery needs through 2028 will be met by three previously announced companies in Europe: its own sites in Germany and Valencia, and the company Northvolt in Sweden. In general, if it is possible to achieve 240 GW‧h per year with five companies, the company will not build the sixth. The company’s decision will depend to a large extent on the willingness of the European authorities to finance the construction of such companies within the framework of partial subsidies.
According to a board spokesman, Volkswagen needs an annual amount of traction batteries in North America that corresponds to 60 to 100 GWh of combined capacity. He did not specify how much of this volume Volkswagen intends to produce on its own in the USA. At the same time, Mr. Schmal emphasized that Volkswagen’s interest in organizing the production of batteries in North America should not be interpreted as a desire to reduce the volume of production of such products in Europe. The auto giant is just waiting to see what support measures the European authorities can offer in light of the appearance of specialized subsidies in the United States.
Last year, Volkswagen announced its willingness to build a traction battery plant in Spain, which is scheduled to go into operation as early as 2026. There is no point in hurrying to choose a location for the construction of the fourth company in Europe. Volkswagen plans to start construction in 2025 at the earliest, by which time the automaker should decide on its location. Targeted subsidies from the EU authorities could speed up the process.
As a Volkswagen board member explains, different models of electric vehicles will use different compositions of traction batteries. The cheapest cars get lithium iron phosphate (LFP) batteries, mid-range models get high manganese batteries, and the most expensive get high silicon batteries.
According to Volkswagen management, the PowerCo division for the production of traction batteries claims a place on the world market, but sees its prospects quite soberly, because up to 95 percent of the segment is controlled by Asian companies.
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