Volkswagen Group has unveiled a major effort to reduce the cost of manufacturing batteries for its electric vehicles in hopes of speeding up the transition from gas-powered cars.
The carmaker, which is the second largest in the world in terms of sales, said it would reduce the cost of manufacturing its batteries by up to 50 percent, build several battery factories around the world, expand its network of charging stations and eventually switch to solid state technology that would reduce costs and increase efficiency. The ultimate goal is to make electric cars with longer ranges and faster charging times – two of the biggest obstacles to the adoption of EVs.
The race for enormous improvements in battery technology is currently one of the most expensive and controversial worldwide. Virtually every automaker is betting that electric vehicles are going to be the future, with some of the largest countries (and largest automotive markets) in the world phasing out gas-powered cars and trucks. To ensure the shift, the batteries need to be more powerful, last longer and be manufactured cheaper to attract enough customers to switch from gas to electric.
“Our transformation will be rapid, it will be unprecedented,” said Herbert Diess, CEO of VW Group. “The transformation will be greater than anything the industry has seen in the last century.”
The carmaker’s nearly two-hour “Power Day” was widely regarded as an echo of Tesla’s recent “Battery Day” event. Both automakers have touched on issues regarding battery chemistry, supply chain, production and charging to make electric vehicles more affordable and attractive to a larger number of customers. Here are the biggest announcements from VW’s Power Day event:
United Battery Cells
From 2023, VW plans to introduce a new, prismatic mobile phone design of its batteries that will be installed in the carmaker’s brands. The goal is to have up to 80 percent of VW’s electric vehicles design the unit by 2030.
Thomas Schmall, board member for technology at Volkswagen Group, said the goal was to reduce the cost of battery production to less than $ 100 per kWh, which according to most experts would make EVs about the same price as gas-powered vehicles.
The price per kilowatt hour (kWh) is the unit of energy most commonly used to measure the capacity of battery packs in modern electric vehicles. Prices have dropped dramatically over the past decade, from $ 1100 / kWh in 2010 to $ 156 / kWh in 2019, a drop of 87 percent.
“We aim to reduce the cost and complexity of the battery while at the same time increasing its range and performance,” Schmall said. “This will ultimately make e-mobility affordable and the dominant driving technology.”
VW hopes to reduce costs even further with more efficient production and a robust recycling process. The carmaker aims to “gradually” reduce battery costs in the entry-level segment by up to 50 percent and in the volume segment by up to 30 percent.
Volkswagen “gigafactories”
One way Volkswagen plans to increase the production of vehicles with batteries is through a massive expansion of its manufacturing footprint. The carmaker plans to operate six battery cell production plants in Europe by 2030, which it will build alone or with partners.
The first two plants are in Salzgitter, Germany and Skelleftea, Sweden; a third plant will be located in Spain, Portugal or France; and the fourth factory will be located in Eastern Europe. The plants have a production capacity of 240 gigawatt-hours per year, Schmall said.
On the same day as VW’s event, Swedish battery maker Northvolt said it had received a $ 14 billion order from the carmaker. Northvolt will also sell its stake in the joint venture Northvolt Zwei to Volkswagen. The Swedish company has said it plans to increase its market share in Europe by 2030 by 2030.
Load extension
Volkswagen said it plans to deploy 18,000 public high-speed charging points in Europe by 2025, a fivefold increase compared to the current state of EV charging on the mainland.
This will be achieved through a series of strategic partnerships announced today. VW has said it will partner with oil giant BP and the best European utilities Enel and Iberdrola to expand the charging of electric vehicles.
With BP, Volkswagen has said it wants to establish around 8,000 fast charging points in Europe, with most stations concentrated in Germany and the UK. The fast chargers with a charging capacity of 150 kW will be installed at a total of 4,000 BP and ARAL filling stations.
In partnership with Spanish Iberdrola, Volkswagen will cover major traffic routes across the country. In Italy, Volkswagen will work with Enel to establish fast charging stations along major highways and in urban areas. The carmaker plans to spend around € 400 million to expand its European EV charging network by 2025.
The company also said it will have 17,000 public fast charging stations in China and by the end of 2021 is set to reach 800 stations in the US through its subsidiary Electrify America.
Two-way loading
From 2022, vehicles built on VW’s modular MEB electric vehicle platform will support two-way or two-way charging. “This will allow green electricity from the solar power system to be stored in the vehicle and fed back into the home network if necessary,” the company said. “Customers will not only be more independent of the public power grid, but they will also save money and reduce CO2 emissions.”
VW plans to offer a range of products to make this possible, including a home energy storage system and a mobile EV charger that is not connected to the network. This will enable car owners to ‘become their own utility’, the company claims.
The company also unveiled a beautiful EV charger robot intended for fleet owners.
Why now?
Volkswagen will need to increase its battery expertise and secure its supply chain if it is to live up to its bold promise to make 50 percent of its sales in the United States by 2030. The company recently launched a concept sedan called Trinity. has ‘high range’ and ‘short load time’ by 2026. The carmaker’s mass-produced modular platform for electric vehicles, or ‘MEB’, will serve as the basis for this massive shift.
Volkswagen announced the MEB platform in 2018 as part of its million-dollar electric vehicle push. It consists of a modular battery pack that can be scaled to fit vehicles of different sizes, a car and other electronics – basically all the technical underpinnings needed to move an electric vehicle. All of Volkswagen’s upcoming electric vehicles with ID branding will be built on the MEB platform, and it will also supply certain vehicles of Volkswagen Group brands such as Audi, Seat and Skoda.
Volkswagen has said it plans to sell access to MEB, an idea Ford has already attracted, which is going to build a commercial vehicle powered by the German carmaker’s platform. But it is also open to start-up partnerships. The first attempt, with the e.Go Mobile from Germany, fell apart after the small startup became insolvent.
VW, which is the second largest carmaker in the world based on volume, has just released its first pair of long-distance EVs, the only ID 3 hatchback and the ID 4 compact SUV, which has just made deliveries in the US.
Initially, the ID 4’s battery pack, consisting of 288 pouch cells in 12 modules, will be manufactured by South Korean LG Chem. But as soon as ID 4 production moves to Chattanooga, Tennessee in 2022, the batteries will be supplied by SK Innovation, another South Korean company that recently opened a $ 2 billion plant near VW’s plant there.
Prior to the meeting, there were reports that VW would turn away from its main battery supplier, the South Korean LG Chem, and turn them over to the CATL of China, according to Motor News, with reference to South Korea’s Money Today online news site.
VW also has contracts with two other major battery manufacturers, Samsung and CATL. And the company supports a startup in San Jose, California, QuantumScape, working on more energy-efficient solid state batteries.
QuantumScape says its solid-state batteries will offer a significant improvement over conventional lithium-ion batteries, enabling electric vehicles that can drive 80 percent further than an EV with a traditional battery. They retain more than 80 percent of their capacity after 800 charge cycles, they are non-combustible and have a volumetric energy density of more than 1000 watts per liter on the cell surface, which is almost double the density of the top-grade commercial lithium-ion packs.
VW called solid state batteries ‘the endgame’.