Vw ceo diess supports alliance to build battery cells for evs in europe electricity inside human body

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Diess said VW has nearly secured all the raw materials it needs to complete the first phase of its electric-car strategy. The company has so far picked partners to provide battery cells and related technology worth around 40 billion euros ($48 billion) for its electric-car program, about 80 percent of the planned volume. This is double the figure that Diess’s predecessor Matthias Mueller gave in March during the presentation of the VW Group’s annual results.

VW’s influential labor leaders have demanded the automaker examine an industrial scale production of battery cells. They were frustrated by Mueller’s refusal to discuss the issue beyond a pilot plant in Salzgitter, Germany, due to go into production next year. "We cannot surrender entirely the production of battery cells over to the Koreans and Chinese," Bernd Osterloh recently told Manager Magazin.

One VW source said the issue was "highly political," with unions across the German auto industry calling for cell manufacturing despite the extremely high level of automation in any cell plant versus a battery pack plant. The problem is therefore the energy costs, not the labor costs. "That’s why Diess suggested ‘Europe’ [rather than Germany proper], since electricity costs are lower in the East. Then again you also don’t want such an EV cell plant to be powered by burning coal, so it’s still not clear," the source said.

Whereas countries like Poland have a relatively dirty power grid, Scandinavia has cleaner hydroelectric energy and Iceland plenty of constant geothermal power. Cells are heavy, however, so VW thinks they should be manufactured relatively close to production. The company is building its Volkswagen ID battery powered cars initially in Zwickau near the border to Poland and Czech Republic.

Daimler said this week that it has awarded a contract for supplying electric car battery cells to a new player, China’s Contemporary Amperex Technology (CATL). The Chinese government may however back away from a tacit requirement for domestic EV cars to source their cells from domestic suppliers as part of a market liberalization. Volkswagen for example had to switch from Panasonic to CATL cells.

Daimler initially invested in own cell production, building a factory in Germany, but it was squeezed out of the market due to its uncompetitive costs at the end of 2015. Daimler has said it would only consider revising its decision for the next generation of battery cells, such as solid-state or lithium-sulphur cells.

LG Chem will open what it says will be Europe’s largest lithium ion battery factory in Poland this year to produce all battery components from electrodes to cells, modules, and packs. Korean rival, Samsung SDI, is building a plant in Hungary that will be ready this year.

Robert Bosch, the one company in Germany that appeared most interested in producing cells, said earlier this year it would not follow through because it would need to invest 20 billion euros in a challenging market dominated by five Asian suppliers.

Diess said VW has nearly secured all the raw materials it needs to complete the first phase of its electric-car strategy. The company has so far picked partners to provide battery cells and related technology worth around 40 billion euros ($48 billion) for its electric-car program, about 80 percent of the planned volume. This is double the figure that Diess’s predecessor Matthias Mueller gave in March during the presentation of the VW Group’s annual results.

VW’s influential labor leaders have demanded the automaker examine an industrial scale production of battery cells. They were frustrated by Mueller’s refusal to discuss the issue beyond a pilot plant in Salzgitter, Germany, due to go into production next year. "We cannot surrender entirely the production of battery cells over to the Koreans and Chinese," Bernd Osterloh recently told Manager Magazin.

One VW source said the issue was "highly political," with unions across the German auto industry calling for cell manufacturing despite the extremely high level of automation in any cell plant versus a battery pack plant. The problem is therefore the energy costs, not the labor costs. "That’s why Diess suggested ‘Europe’ [rather than Germany proper], since electricity costs are lower in the East. Then again you also don’t want such an EV cell plant to be powered by burning coal, so it’s still not clear," the source said.

Whereas countries like Poland have a relatively dirty power grid, Scandinavia has cleaner hydroelectric energy and Iceland plenty of constant geothermal power. Cells are heavy, however, so VW thinks they should be manufactured relatively close to production. The company is building its Volkswagen ID battery powered cars initially in Zwickau near the border to Poland and Czech Republic.

Daimler said this week that it has awarded a contract for supplying electric car battery cells to a new player, China’s Contemporary Amperex Technology (CATL). The Chinese government may however back away from a tacit requirement for domestic EV cars to source their cells from domestic suppliers as part of a market liberalization. Volkswagen for example had to switch from Panasonic to CATL cells.

Daimler initially invested in own cell production, building a factory in Germany, but it was squeezed out of the market due to its uncompetitive costs at the end of 2015. Daimler has said it would only consider revising its decision for the next generation of battery cells, such as solid-state or lithium-sulphur cells.

LG Chem will open what it says will be Europe’s largest lithium ion battery factory in Poland this year to produce all battery components from electrodes to cells, modules, and packs. Korean rival, Samsung SDI, is building a plant in Hungary that will be ready this year.

Robert Bosch, the one company in Germany that appeared most interested in producing cells, said earlier this year it would not follow through because it would need to invest 20 billion euros in a challenging market dominated by five Asian suppliers.