Volkswagen has signed an agreement with Swedish company Northvolt to build a giant battery factory in Germany. The company also confirmed the production data for two new key models.
The German company said lithium-ion battery production would start in late 2023 or early 2024, a vital move for Volkswagen’s ability to achieve what the company calls “the largest electric vehicle offensive in the world.”
The group plans to launch nearly 70 new electric models in the next decade and hopes to build 22 million electric cars in this period. The company invests over 30 billion euros in electrifying its offer over the next four years, partly due to pressure from regulators and the need to cease the polluting emissions scandal.
If it succeeds, Volkswagen could outperform rivals such as Tesla and or Chinese company BYD, funded by billionaire Warren-Buffet in China.
Lithium-ion batteries, the majority of which are currently produced in China, are a critical part of Volkswagen’s strategy. Batteries make up about a third of the cost of electric cars, according to consulting firm Wood Mackenzie.
China hosts 70% of global lithium cell production capacity, with the United States ranked second, with 12%. Europe lags behind and hosts only about 3% of global production capacity, according to the European Commission.
Volkswagen is investing 900 million euros in the joint venture with Northvolt. Some of the money will go to the factory, and the rest will provide Volkswagen a 20% stake in Northvolt and a seat on the board.
Volkswagen also confirmed that production of the new ID.3 electric car series will begin in November, with the first models being delivered to customers next year. A limited-edition of ID.3 is set to make its world debut on September 9 at the Frankfurt Motor Show.
Also, an electric version of the Volkswagen Beetle collection will be presented for the first time. The Beetle conversion is done by a specialist partner company, eClassics, and will use components from the new city car “e-up!”.
Porsche, one of Volkswagen’s premium brands, has confirmed that it will start producing its first totally electric sports car – Taycan – on September 9th.