Volkswagen CEO: 'We Have Sourced Batteries for 50 Million Electric Cars'

VW claims to already have two factories set up solely for EV production; one in Germany and one in China.

Ingo Barenschee—Ingo Barenschee

Volkswagen has revealed that it has plans to manufacture 50 million electric vehicles on its MEB modular electric vehicle platform, and has already set aside €50 billion ($56 billion) for the purchase of electric vehicle batteries.

Volkswagen stated in September that it aspires to sell one million EVs annually by 2025, which Volkswagen Group CEO Herbert Diess stated will start in 2020 with sales of its compact I.D. electric hatchback.

"The [MEB] platform is already booked for 50 million electric cars," said Diess in an interview with Automotive News. "We have sourced the batteries for 50 million electric cars, so this is a huge momentum coming, and probably from a volume piece, I think we have the best setup strategy for the electric vehicles to come."

"The first car we will be launching next year, early 2020, will be the I.D., the size of a Golf, but because it's a full-electric platform, it has the interior space of a Passat," he added. "It has 400 to 600 kilometers (249 to 373 miles) of range, fast acceleration, fast charging and comes at the price of a diesel."

It is unknown whether the I.D. will be the sub-$23,000 EV reported to be on the agenda for discussion by VW executives at a board meeting this Friday. What is certain is that the automaker's existing manufacturing facilities won't be adequate to put out one million EVs per year, but the company has a solution to that problem.

"Just last week, I was in China," continued Diess. "We broke ground for a car plant which will only produce electric cars. We have our first plant in Germany which only will produce electric cars."

Diess was noncommittal as to whether the automaker would open another factory in the United States for electric vehicles, or whether its current Chattanooga, SC factory would be expanded to accommodate EV production lines.

"We're considering. It's too early to announce, but we are considering, we are considering launches, but I would leave that to Scott [Keogh, former Audi USA president]. He has to make up his mind," said Diess. "We set up the plant in Chattanooga always with the idea to be able to grow it, to mirror it. The plant is still too small, and we are considering different options—it might be electric cars, it might be a different derivative of the Atlas—it's still open."

Volkswagen confirmed to Reuters on Monday that it has earmarked €50 billion for EV battery purchases, but according to estimates by BMW, this won't be nearly enough to put batteries in all 50 million of VW's planned EVs.

BMW board member Klaus Fröhlich says that batteries will cost €100-150 per kilowatt-hour (kWh), and using the model of VW's smallest confirmed EV battery capacity of 48 kWh, VW's €50 billion would buy just over 10.4 million of VW's smallest batteries, powering barely a fifth of its forecasted EVs, and that's without any customers opting for larger 64 or 111 kWh packs.

A Bloomberg analyst predicts that lithium-ion battery costs will fall 52 percent by 2030, but even accounting for that reduction in costs, VW's €50 billion would be inadequate to purchase more than 21.7 million of its smallest EV batteries. If costs fall as Bloomberg predicts, VW will need at least €115.2 billion for batteries, but if battery prices remain where BMW forecasts they'll be, VW could need €240 billion to cover battery costs for its 50 million EVs.

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