Volkswagen to Invest in Mines, Plans to Become Global Battery Supplier
According to Reuters, Volkswagen plans to invest in mines to decrease battery cell costs, fulfill half of its own demand, and sell to third-party customers.
Thomas Schmall, the carmaker’s board member in charge of technology, stated that Volkswagen aims for its battery unit, PowerCo, to become a global battery supplier and satisfy half of its demand with plants mainly in Europe and North America. PowerCo will initially supply cells to Ford for 1.2 million vehicles built in Europe on Volkswagen’s electric MEB platform.
Schmall mentioned that mining capacity is the bottleneck for raw materials, which is why direct investment in mines is necessary. Volkswagen is partnering with mining companies in Canada, where it will construct its first North American battery plant.
He envisions a future with a limited number of battery standards, with Volkswagen being one of them due to its high production volume and third-party sales business.
PowerCo, established in 2021, targets over €20 billion in annual sales by 2030. Production is set to commence at PowerCo’s plants in Salzgitter, Germany, in 2025; Valencia, Spain, in 2026; and Ontario, Canada, in 2027.
The board member said he’s confident that Volkswagen can expand quickly and must do so to build an affordable EV, as 40% of the costs come from the battery. Recently, Volkswagen revealed details of a €25,000 EV for the European market, planned for availability in 2025.