Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

VW expects battery, raw material drive to cost up to $34 billion

Stock MarketsDec 01, 2021 05:06AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A new logo of German carmaker Volkswagen is unveiled at the VW headquarters in Wolfsburg, Germany September 9, 2019. REUTERS/Fabian Bimmer/File Photo

By Christoph Steitz

FRANKFURT (Reuters) - Volkswagen (DE:VOWG_p)'s planned European battery cell plants and securing vital raw materials will cost as much as 30 billion euros ($34 billion), board member Thomas Schmall said, putting a price tag on the expansion for the first time.

Schmall, who is in charge of technology at Europe's largest carmaker, said in an interview at  the  Reuters Next conference that Volkswagen would seek outside partners to fund it.

"We are talking about 25 to 30 billion (euros) ... including the vertical chain of raw materials, not only the factories," the 57-year old said, adding VW would not have to take the lead on funding and was not aiming for a 50/50 investment split.

"It depends on the partnership model we will establish in the next months. We're open to discuss it. For us it's necessary that we can control ... the technology roadmap, the timing, the costs and the availability to enable our rollout."

Schmall is overseeing Volkswagen's ambitious plan to build six large battery cell plants in Europe by the end of the decade, a strategic pillar in its bid to overtake Tesla (NASDAQ:TSLA) and become the world's top electric vehicles seller.

Sweden's Northvolt, the first plant in which Volkswagen owns a fifth, will start production premium cells for the German carmaker from 2023. The second plant, to be built jointly with China's Gotion High-Tech in Salzgitter, is to start in 2025.

Four more plants will follow by the end of the decade, most likely in Spain, eastern Europe and two additional locations that have so far not been disclosed.

Costs will be 1 billion to 2 billion euros per plant while capacity will range from 40 up to a maximum of 80 gigawatt hours (GWh), depending on the chemistry as well as whether enough energy supplies are available, Schmall said.

"We have some natural limits in the availability of utilities, energy, water," he said.

CLOSED LOOP

But production capacity is only one part of the equation, Schmall said, adding that Volkswagen also had to make sure it gets enough raw materials, such as lithium and nickel.

This requires a more proactive approach and Schmall said that Volkswagen was looking to strike partnerships, with cooperation announcements due "in some weeks".

Volkswagen, which plans to submit its next five-year investment plan to the supervisory board on Dec. 9, is pursuing a mix of strategies, which might even include becoming a shareholder in a mining firm.

"You will see the full range," Schmall said, also referring to fixed and mixed price contracts with suppliers. "You have to tailor-fit solutions, necessarily, to specific raw materials."

This also requires making sure that materials are procured sustainably, which, in Volkswagen's case, includes transparency reports, supplier ratings, and efforts to phase out some materials, most notably cobalt.

In the end, Schmall said, the goal was to ensure that the full production chain was sustainable, adding that producing electric vehicles alone was not enough for Volkswagen, which is aiming to be carbon neutral by 2050 at the latest.

"And this altogether brings us in this closed loop and hopefully show you that we are taking care from the beginning on, from the first step, from the mining process, to be sustainable, until the last point of battery lives and car lives and recycling," he said.

To watch the Reuters Next conference please register here https://reutersevents.com/events/next

($1 = 0.8917 euros)

VW expects battery, raw material drive to cost up to $34 billion
 

Related Articles

Microsoft offers strong forecast, lifting shares
Microsoft offers strong forecast, lifting shares By Reuters - Jan 26, 2022 8

By Nivedita Balu and Jane Lanhee Lee (Reuters) -Microsoft Corp on Tuesday forecast revenue for the current quarter broadly ahead of Wall Street targets, driven in part by its...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email