VW to Develop EV Battery Supply Chain through US$34 billion Push
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VW to Develop EV Battery Supply Chain through US$34 billion Push

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Antonio Gozain By Antonio Gozain | Senior Journalist and Industry Analyst - Wed, 12/08/2021 - 14:11

Volkswagen announced its entrance into three strategic partnerships to strengthen its position in the field of electric batteries. The US$34 billion push by Volkswagen aims to close its gap in the EV competition with Tesla.

Volkswagen’s new partners are the material technology group Umicore, the battery specialist 24M Technologies and cleantech company Vulcan Energy Resources. While the three partnerships are independent from each other, they share a common goal: the industrialization of battery technology and the volume production of batteries, informed Volkswagen this Wednesday through a press release.

“Volkswagen is implementing its battery strategy very consistently and at a high pace. Volkswagen’s unified cell must be at the forefront of performance, costs and sustainability right from the start. With our new partners, we are one step closer to reaching this goal. Together, we will focus on key parts of the battery value chain and develop cutting-edge technologies,” said Thomas Schmall, Member of the Board of Management of Volkswagen Group for Technology and CEO, Volkswagen Group Components.

Volkswagen will establish a joint venture with Umicore, a leading company in clean mobility materials to supply VW’s European cell factories with cathode materials. Once the automaker sets up large-scale, in-house production of the unified cell, this step will help the vertical integration of its supply chain. The goal for 2030 is to reach annual production capacity of up to 160 GWh to power approximately 2.2 million BEVs.

“We are very pleased to become a long-term partner for Volkswagen in achieving its ambitious e-mobility strategy in the EU and in bringing our long-standing and proven expertise in rechargeable battery materials to this unique joint venture,” said Mathias Miedreich, CEO, Umicore.

Volkswagen’s partnership with Vulcan Energy Resources, the world’s first lithium producer with net zero greenhouse gas emissions, concerns the supply of CO2-neutral lithium from the Upper Rhine Valley in Germany. The contract includes five years of lithium hydroxide supply starting 2026 for Volkswagen’s in-house cell production in Germany and the EU.

“Through this agreement, Vulcan Energy will become a major enabler of Volkswagen’s world-leading target to produce carbon neutral EVs, including all raw materials in the battery supply chain. We look forward to working closely with Volkswagen Group to build sustainable, local lithium supply for the German and European automotive sector,” said Francis Wedin, Managing Director, Vulcan Energy Resources.

The third move by Volkswagen is an investment in Cambridge-based startup 24M to industrialize its technology in the dry coating process. The target is to generate “considerable cost optimization” in future battery production by reducing material usage and eliminating several steps from the conventional production process, according to the automaker.

Earlier this week, several media outlets reported Volkswagen’s goals for a public offering of its luxury brand Porsche to raise capital in its costly shift to electrification. As a standalone company, Porsche could be valued somewhere between US$50 billion and US$100 billion, according to The Guardian.

Despite Volkswagen’s electrification efforts in the EU, the German automaker does not commercialize any of its 9 PHEV models in Mexico. Of its EVs, the ID.4 model (Volkswagen’s electric SUV) is currently being sold in the US and manufactured in Germany. The automaker’s Tennessee plant will begin production of ID.4 in 2022, opening the opportunity to commercialize the vehicle in Mexico.

Photo by:   Volkswagen

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