Published on June 16th, 2019 | by Daniel Sherman Fernandez

VW’s 900 Million Euro Investment In Battery Technology

The Volkswagen Group is investing 900million euros in the Swedish company Northvolt that specializes in EV batteries.Volkswagen is showing its commitment to move as far away as possible from itsdays of the diesel-gate scandal will soon have an all electric range in itsproduct portfolio which will be complimented by a range of petrol poweredvehicles for the remaining die-hard gearheads.

The goal in this investment is to create ajoint venture (50/50) and build a battery factory. It will be located inSalzgitter in Germany and will produce the equivalent of 16 GWh/year. The startof ground work is expected to be in 2020 for an effective full production by2023.

The battery technology will certainly bethe centerpiece of all the new VW group electric cars for the coming years. Weknow that Volkswagen will need 300 GWh to complete its projects. It willtherefore need several suppliers. Samsung was expected to supply 20 GWh to theGerman manufacturer, but the contract eventually melted around 5 GWh. The ideacoming from Volkswagen management is to reduce its dependencies on Asian batterysuppliers in time and this will of course be very difficult given thecompetition.

Demand for battery technology is expectedto increase by 22.9% per year, while overall lithium demand is expected toincrease by 17.3% per year through 2028, exceeding 1.0 Mt LCE in 2026. However,according to a report by Roskill, production of lithium compounds for batteriesis expected to reach 855 kt LCE by 2028, a level below expected demand.

More information will be shared in coming months.

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