Volkswagen says it has lined up 20 billion euros ($25 billion) worth of battery supplies to support a significant increase in EV production over the next few years. The world’s largest automaker will equip 16 factories to produce EVs by the end of 2022, compared with the three it has today.
VW says it plans to build as many as 3 million plug-in vehicles per year by 2025. Starting later this year, the 12 brands of the Volkswagen Group will roll out a new battery-powered model “virtually every month,” CEO Matthias Mueller said at the company’s annual press conference. “This is how we intend to offer the largest fleet of electric vehicles in the world.”
The recently announced agreements with suppliers including Samsung SDI, LG Chem and Contemporary Amperex are meant to secure a supply of batteries for the European and Chinese markets. A deal for North America is expected to follow shortly. In total, VW says it plans to purchase about 50 billion euros worth of batteries as part of its EV strategy.
However, Bloomberg believes that the company’s power-supply issues are far from over. VW has struggled to secure sources of cobalt, and says it’s working on ways to reduce the amount of the element needed for its battery packs. Access to the strategic metal remains a long-term issue for the whole industry, Chief Financial Officer Frank Witter told Bloomberg TV.