Volkswagen Assigns $25b in Battery Orders

Volkswagen has picked partners to provide battery cells and related technology worth around €20 billion ($25 billion) for its growing electric car program, adding further pressure on US pioneer Tesla.

Until its “dieselgate” emissions scandal was revealed two and a half years ago, Europe’s largest automaker had been slow to embrace electric cars. But the fraud prompted a strategic shift, while advances in batteries and a global fight against pollution are raising pressure on carmakers to adopt zero-emission alternatives, Reuters reported.

Volkswagen said on Tuesday it had secured battery technology deliveries for Europe and China, where it sells 80% of its vehicles, and will select a supplier for North America soon.

While Tesla’s much-anticipated Model 3 sedan has already missed some key production targets, VW plans to expand assembly of zero-emission cars to 16 plants globally through the end of 2022 from three at present.

“We have pulled out all the stops over the past months to implement the Roadmap E swiftly and resolutely,” Chief Executive Matthias Mueller said at a news conference, referring to the electric vehicle program.

The company’s emissions scandal, new Chinese quotas for electric cars and tightening rules on carbon dioxide emissions in Europe are causing automakers to focus on green cars and self-driving technology.

VW has a goal to sell 3 million electric cars per year across the group by 2025 and to offer an electric version of each of the group’s 300 models by 2030.

"LG Chem, Samsung and Chinese battery maker Contemporary Amperex Technology Company will deliver batteries to VW, which has no plans to start producing powerpacks by itself," Mueller said.

“Building up expertise and mastering the technology does not necessarily imply that we want to start large-scale assembly of batteries ourselves. Others can do it better than we can.”