By on May 15, 2019

On Tuesday, Volkswagen announced its plan to assemble 600,000 electric vehicles utilizing the brand’s MEB platform at two plants in China. The facilities, said to be located in the cities of Anting and Foshan, will help bolster EV volume after the completion of VW’s Zwickau plant in Germany — which the company previously claimed would manufacture 330,000 cars annually.

While that facility is nearing completion and supposed to be up and running before 2020, there’s no firm timeline in place for China. But that’s the least of the issues Volkswagen must solve in order to make this dream a reality. 

On the same day as the factory announcement, VW also doubled its previous estimate of the number of battery cells it would have to acquire to become the world’s leader in electrification. The company now believes it will need to source more than 300 gigawatt hours of annual supply in 2025 just to support Europe and Asia. However, this has as much to do with a new mandate from the European Union (which requires automakers to reduce CO2 emissions by 37.5 percent by 2030, vs 2021 levels) as it does Volkswagen’s own ambitions.

Unlike the United States, where discussions are still ongoing, officials in Europe and China have basically decided that the internal combustion engine has to go. This seems to suit the modern-day version of VW Group just fine. VW’s supervisory board already agreed to build a 1 billion euro ($1.12 billion) battery plant in Salzgitter, Germany, not far from the Zwickau plant, on Monday. The facility will be a joint operation between VW and Swedish partner Northvolt, with a completion date of 2022.

“Volkswagen leads the competition on e-mobility,” CEO Herbert Diess said at the company’s annual meeting in Berlin. “As a company we’ll make a success of the electric car — with the right products, superior underpinnings and global economies of scale.”

According to Automotive News, Volkswagen doesn’t intend to stop here, and is already considering sites for additional EV factories. While this unquestionably proves the firm’s commitment to electrification, it could easily spark anxiety. Numerous media outlets are framing this as VW’s push to surpass Tesla. And yet VW’s first ground-up electric car hasn’t seen the same kind of enthusiasm as product born of the American outfit.

Thus far, Volkswagen’s ID3 hatchback has amassed more than 15,000 pre-orders from customers putting down 1,000-euro deposits. Meanwhile, Tesla’s Model 3 averaged 1,800 new orders a day in its introductory year and is presently trying to expand in both Europe and Asia. All told, Volkswagen intends to spend 30 billion euros ($34 billion) to surpass Tesla as the world’s biggest electric-vehicle manufacturer. For its sake, we hope the effort pays off.

[Image: Volkswagen]

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20 Comments on “You Can’t Blame Volkswagen for Trying...”

  • avatar
    SCE to AUX

    Securing a battery source is the hardest part. Where are they going to get 300 GWh of batteries per year? That’s enough for maybe 5 million cars.

    To their credit, this is what going all in looks like.

    • 0 avatar

      They are diving into an empty pool and hoping to fill it with enough water before they land. It’s insanity.

      They aren’t even utilizing the batteries they have in a good way. Their existing BEVs aren’t super efficient; plug in hybrids are a waste for most people and the ZF8 based hybrid system sucks. Hybrids need big electric HP to maximize efficiency and the ZF8 based systems limit motor size (and by extension effectiveness). For an effort with the goal of efficiency and managing limited resources it’s incredibly wasteful

  • avatar
    schmitt trigger

    Sourcing the raw materials to produce the batteries is the challenge.

    Lithium will be the 21st Century strategic material.

    • 0 avatar

      Drive around northern Chile, home to half the world’s lithium deposits. Lots of Chinese “tourists” on the Altiplano.

      • 0 avatar

        It is interesting that Chili has a great admiration of Germans. Chilian army is a Wehrmacht knock-off even including marching to “Deutsche Soldaten und die Offizieren”. I do not see a problem with VW getting preferential treatment from Chileans.

        • 0 avatar

          Chile has always had a strong European presence and in the late 1800s about 30,000 Germans emigrated to Chile. In the central part of the country (Lake District) you’ll see European-style houses and find some darned good bakeries. Many of the older folks there speak German and Spanish.

  • avatar

    I’d rather be hit by this than a Pacifica.

  • avatar
    R Henry

    Production in China necessarily requires all technological assets (of their most impotant IP!)to be available to the Chinese. Not a good strategic plan.

  • avatar
    R Henry

    I view this slowly unfolding battery debacle has a competitive advantage for manufacturers who remained committed to ICEs.

  • avatar

    Maybe they should spend a few billion Euros on developing a really small nuclear reactor (not kidding). It might be more realistic than finding 300 gigawatts’ worth of batteries on an annual basis, presuming they are able to sell that many EVs.

  • avatar

    I think the mix of EV, Hybrid and some fuel efficient vehicles is all good, but how do other countries pay for roads? Here in the states, Oregon and Illinois (for example) are going out of their way to develop special taxes for EVs. Recently IL enacted a $1000 per year on EVs because they don’t use gas. Oregon on the other hand sometime back in 2011 talked about a $0.016 per mile for EVs and the discussion on how to track the miles, privacy, etc. So in 2017 Oregon starts to move forward but on a smaller amount for EVs.. and that’s where I dropped the story. Oh, and they were or did add a tax on bikes (mountain, cross-overs, etc) as well for the same reason.

    What’s next? Tax you for wearing sandals because you use less material?

    My thought and maybe this will catch on, each VIN has details about a vehicle weight? And weight can be related to damage to roads (over time)? Maybe? The additional tax comes from all the drivers using 6-10,000 lbs vehicles as their daily driver.

    A co-worker pulls a trailer 365 days a year and thinks his 6-10 mpg truck (and trailer) should be charged the same as a hybrid or high mileage car.

    Sorry for getting off track.. the EV story reminded me of the article out of IL last week .. the gas tax going from $0.19 to $0.44 per gallon and the annual $1000 EV tax.

    • 0 avatar

      The truck driver is getting taxed significantly more than the Prius driver, by virtue of buying significantly more fuel. Not to mention the truck holds its value better than the Prius and will incur a larger tax bill every year.

      • 0 avatar

        Buying more fuel doesn’t come close to the additional damage to the roads. Multiple the number of vehicles that clock in at over 6,000 lbs or better there’s a significant cost increase. Air pollutants, increased loss of a resource that everyone enjoys (oil), more tires, more landfill, etc. Aren’t the EVs just the opposite? There’s probably some argument for the amount of energy lost for acquiring the materials for the EV batteries. Locally they push E15, corn state, but what’s the actual energy expended for all the alcohol plants. Everyone wants their subsides, healthy pensions (f-that, do what everyone else has to deal with, 401ks), and pet projects .. so easier to dig at the tax payer.

        Still stand by — trucks, SUVs, etc– all cost everyone more one way or another.

        • 0 avatar

          I’m not pro or con EV taxes you speak of but truck drivers pay plenty in taxes as is. I do think your overstating the damage a 6000lb truck does over a 4200 lb sedan. Bigger footprint of the truck tire certainly helps spread the weight better than the skinny eco tires coming on modern sedans.

    • 0 avatar

      “What’s next? Tax you for wearing sandals because you use less material?”

      I just thought of The Beatles’ “Tax Man”:
      If you drive a car, I’ll tax the street,
      If you try to sit, I’ll tax your seat.
      If you get too cold I’ll tax the heat,
      If you take a walk, I’ll tax your feet.

  • avatar

    Given the slow tickle of e-Golfs Volkswagen is able to get to areas of high demand, I take all this with a grain of salt.

  • avatar

    China had been saying for years it wanted to be the Number One source for LiON batteries. No one paid them the least attention as they inked up contracts on cobalt and lithium worldwide. Except Tesla. Also China itself is the source of rare-earth minerals for permanent magnets and doles these out sparingly to the West.

    So here we are with the average car manufacturer a day late and a dollar short as usual, and people wonder why EVs are gong to made in huge quantities in China. Because they can make the batteries that’s why, while the chickens run around with their heads cut off in the EU looking for supply. Tesla got this part right. Now we can watch the others squirm.

    • 0 avatar

      “Tesla got this right”?! In 10 years they will have negligible market share in China. China will take their tech and trained engineers, workers and eventually the local players will win – they always do. Apple replaced by Huawei, Uber by locals, google, facebook, amazon, soon starbucks.

      • 0 avatar

        Uber = Didi
        Google = Baidu
        Facebook = Weibo/Tencent
        Amazon = Alibaba
        Starbucks = Starbucks (some things are unassailable)

        • 0 avatar

          You are right about the first four, but not number 5. Starbucks =Luckin soon.

          China always supports the local company. Google maps works anywhere, except . . . hmm. Uber anywhere except hmmm.

          Tesla, and VW and all other non-Chinese companies will not be allowed to succeed in the long run.

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