Achtung, fertig, los! Volkswagon Jumps into the EV Battery Wars

Image: Volkswagon

by Natasha Lasky, ODP Staff Writer

Volkswagon, the world’s second-largest car company by sales announced this week that it would take aim at reducing the cost of eclectic vehicle batteries. According to the Verge, Volkswagon aims to:

  • Reduce the costs of producing its batteries by up to 50%.
  • Build multiple battery factories around the world.
  • Expand its network of charging stations, and eventually transition to solid-state technology that would cut costs and boost efficiency.

Why This Matters: In order for more electric cars to get on the road, their costs have to come down. Currently, as Bloomberg explained, the battery pack is the single most expensive part of an electric vehicle, accounting for about 30 percent of the total cost to consumers. Yet significantly bringing down this cost is what Volkawagon hopes will be its competitive advantage as it plans to transition to all electric cars by 2026.

At a $100/kWh price for batteries, car manufacturers will be able to sell mass-market electric vehicles at the same price (and with the same margin) as comparable internal combustion vehicles, according to BloombergNEF. The race is on for manufacturers to reach this competitive price point and begin selling their cars en masse to consumers. 

As Forbes reported, electric vehicle battery prices in 2020 were 13% lower than in 2019, thanks to increasing order sizes, the growth in electric vehicle sales and the introduction of new battery pack designs, according to BNEF’s 2020 Battery Price Survey, which considers passenger EVs, e-buses and commercial EVs as well as stationary storage. 

  • New cathode chemistries and falling manufacturing costs will drive prices down in the near term, the research group says.

Looking Good for EVs: Wood Mackenzie, an energy research and consulting firm, suggests that electric vehicles will make up 18 percent of new car sales by 2030, which will increase the demand for batteries — and the materials to make them. The top battery manufacturers are currently dominated by China, Japan, and South Korea, American companies like Tesla and Ford are also competing to find the best car battery technology. 

Public policy is also increasingly beginning to facilitate the mass expansion of EVs. California, for example, announced its aim to phase out the sale of all gas-powered cars by 2035. And President Biden has also proposed a “cash for clunkers” program in his climate plan, which gives customers money for their used cars in exchange for new, American-made EVs. 

VW Charges Up: Volkswagen is aggressively spending to catch up to Tesla in the hopes of becoming an electric vehicle powerhouse. As Bloomberg explained, if Tesla is Apple, VW desperately hopes to be the Samsung. 

Volkswagen Group announced a number of changes to their EVs and their electric vehicle production to entice drivers away from gas-powered cars:

  • Starting in 2023, VW would introduce a new “unified prismatic cell design” for its batteries that operate much more cheaply, at $100 per kWh, in order to compete with the prices of gas-powered vehicles. 
  • Scale up the production of EVs by constructing six more factories in Europe by 2030. 
  • Build 18,000 public fast-charging stations to be available for use in Europe by 2025. It would also put 17,000 stations in China and 800 stations in the US by the end of 2021.
  • Support two-way charging, which can allow solar panels on the car to charge the battery while the car is in use. 

At a “Power Day” event, Thomas Schmall, Volkswagen Group Board Member for Technology, saidWe aim to reduce the cost and complexity of the battery and at the same time increase its range and performance. This will finally make e-mobility affordable and the dominant drive technology.”


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