Volkswagen is aiming big for the burgeoning electric car market. It is not only retooling 16 of its plants to produce electric cars, it is also pushing its battery partners to to invest heavily in battery cell manufacturing.
In a significant development of strategic importance, Volkswagen is pushing its joint venture partners including SK Innovation (SKI) to build electric car battery plants which have at least one Gigawatt manufacturing capacity, said its Chief Executive Herbert Diess.
“Anything below that amount would make little sense,” said Diess on the sidelines of the Shanghai Auto Show.
Volkswagen plans on buying battery cells for electric cars worth at least $56.57 billion (50 billion euros) and has identified South Korea’s SKI, LG Chem and Samsung SDI as its strategic battery cell suppliers.
It will also be sourcing from China’s Contemporary Amperex Technology Co Ltd (CATL).
Volkswagen is retooling sixteen factories to build electric vehicles and plans to start prodution of thirty three different electric cars models under its Audi, VW, Skoda, and Seat brands, by mid 2023.
“We are considering an investment in a battery manufacturer in order to reinforce our electrification offensive and build up the necessary know-how,” said Volkswagen.
SKI is building a battery cell manufacturing plant in the United States to supply Volkswagen’s plant in Chattanooga, Tennessee.
SKI will supply lithium-ion battery cells for an electric car that Volkswagen plans to start making in Chattanooga in 2022.
LG Chem, Samsung and SKI on will also supply battery cells for Volkswagen in Europe. CATL is the automaker’s strategic partner for China, and will supply batteries for its electric fleet from 2019.