The race to secure vehicle battery supplies is heating up, as the world’s biggest car firms prepare to go electric
Volkswagen (VW) is planning to build six battery factories across Europe over the next decade, as the world’s biggest car firm prepares to accelerate its full-scale transformation into an electric vehicle (EVs) business.
The manufacturing centres will produce cells for almost five million cars annually, with the German car firm now expecting around 70 per cent of its European sales and 50 per cent of its US and China sales to be electric by 2030.
The facilities are set to have a combined capacity of 240 gigawatt-hours per year, VW said, adding that it plans to increase the number of high-powered chargers around the continent five-fold by 2025.
VW’s ambitious plans form part of an industry-wide scramble to secure battery supply chains ahead of a period of tightening regulations restricting the use of combustion engine vehicles. The UK is set to ban sales of new petrol and diesel vehicles by 2030, while the European Union is considering strict new measures that could come into effect from 2025. Norway already has a ban in place for the sale of new internal combustion engine cars from 2025, which will include hybrid and plug-in hybrid vehicles.
These industry-transforming regulations are encouraging carmakers to accelerate the development of electric models, spurring a rush to secure supplies of electric batteries. For example, Tesla is seeking to increase the vertical integration of its battery supply chain by pursuing production assets of key minerals such as lithium and nickel used in the batteries, while Chinese firm Geely announced Monday it is spending $5bn building a new battery factory in Ganzhou with a capacity of 42GWh.
As well as building new production plants, VW has also placed a $14bn order for batteries from Northvolt through the next decade, catapulting the Nordic firm into the role of the region’s lead battery supplier. Northvolt is planning to build its first Gigafactory close to the Arctic Circle in northern Sweden to meet accelerating demand – founded in 2016, the Swedish start-up now has more than $27bn in orders from industrial customers.
Read more: businessgreen.com