Earlier today, German automaker Volkswagen held its first-ever “Power Day” event. Similar to Tesla’s Battery Day, Volkswagen outlined its plans for reducing the cost of electric vehicles, how it will supply battery cells for its massive EV push, a new “unified” battery cell, and the how company’s charging network is being funded by BP and other European-based energy companies.
Batteries and Cell Production
Every company involved with electric vehicles knows that to reduce the cost of its cars, sourcing batteries is 9/10ths of the battle. Batteries make up a substantial portion of an electric vehicle’s overall cost. With increased battery production and purchasing, EV makers hold the ability to lower the cost of their vehicles overall. Tesla outlined this last September at its own battery-focused event.
Volkswagen’s roadmap isn’t much different than Tesla’s. The company plans to increase cell production in Europe by a substantial margin, developing six new cell factories that will be fully operational by 2030.
“Together with partners, we want to have a total of six cell factories up and running in Europe by 2030, thus guaranteeing security of supply,” Thomas Schmall, Member of the Board of Management of Volkswagen Group for Technology and CEO of VW Group Components, said. The six new factories will produce cells with a total energy value of 240 GWh per year by the time they are finished. Two of the factories will operate in Sweden, with one in Skellefteå and another in Salzgitter. The Salzgitter factory will produce cells for VW’s “high-volume segment” starting in 2025 and will have up to 40 GWh per year of capacity.
Additionally, the company said that it “has decided to refocus the previous plan in relation to cell production and concentrate production of its premium cells in the Swedish gigafactory “Northvolt Ett” in Skellefteå in collaboration with Northvolt.” This factory will begin producing cells in 2023 and will be expanded to a final annual capacity of 40 GWh.
New Unified Battery Cell in 2023
Volkswagen’s plan to reduce costs is funneled through battery developments and improvements. Schmall outlined this with the idea of new, more cost-effective cells that will increase range and performance. “This will finally make e-mobility affordable and the dominant drive technology,” Schmall said.
While Volkswagen plans to purchase cells from suppliers, it also plans to create cells in-house within a series of battery production facilities. In 2023, a new, unified cell will be launched and installed in 80% of the Volkswagen group’s electric vehicles. “We will use our economies of scale to the benefit of our customers when it comes to the battery too. On average, we will drive down the cost of battery systems to significantly below €100 per kilowatt-hour,” Schmall added.
“Integration of the Value Chain”
In an attempt to secure the long-term supply of its battery cells to alleviate any concerns over its transition to electromobility, Volkswagen says it will focus on partnerships with selected strategic partners. “The new prismatic unified cell also offers the best conditions for the transition to the solid state cell – the next quantum leap in battery technology, which Volkswagen anticipates for the middle of the decade. The Group focuses consistently on strategic partnerships and efficient use of resources both for batteries and for charging,” VW said. Additionally, the VW Group said it will adhere to its strategic financial targets and will continue to aim for a 6% CAPEX ratio by 2025. It also plans to have a net cash flow of more than €10 billion in its core automotive business.
Charging Network fueled by partnerships with BP, Iberdrola, Enel
Volkswagen isn’t only working on its battery plans. The company also is working on expanding its charging platform by calling upon European power companies to help with the rollout. Partnerships with IONITY and BP will establish 8,000 new charging points throughout Europe. Additionally, 4,000 150 kW chargers will be installed at BP and ARAL service stations in Germany and Great Britain. Spain-based Iberdrola will assist Volkswagen with main traffic route coverage in Spain, and Italian company Enel will help with main and urban motorways in Italy.
Volkswagen says its total investment package for the charging infrastructure will cost around €400 million by 2025 and is looking for other companies to partner with.
In North America, 3,500 fast-charging points will be installed by Electrify America by the end of the year. In China, 17,000 will be installed as well.
Planned V2G Capability
While Volkswagen says it intends to “integrate the electric car in private, commercial and public energy systems in the future,” it says that vehicles using the MEB platform will support energy storage capabilities starting in 2022. Bidirectional wall boxes to energy management systems will be developed as well, allowing owners to supply power to residential buildings, businesses, or the general power grid when needed.
Volkswagen’s full Power Day event is available below.
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