Volkswagen R&D Boss Predicts Major Potential Electric Car Battery Shortage

Dozens of new factories may be needed to meet battery demand, a top VW manager says.

byStephen Edelstein|
Volkswagen R&D Boss Predicts Major Potential Electric Car Battery Shortage

Several automakers are planning large numbers of electric cars for the near future, but that could lead to a shortage of lithium-ion battery cells, one Volkswagen executive believes.

Volkswagen Group R&D boss Ulrich Eichhorn recently said the auto industry will need to add manufacturing capacity equivalent to 40 Tesla "Gigafactories" over the next decade in order to meet demand, according to Automotive News. That's based on the assumption that other automakers will match VW's goal of making electric cars account for 25 percent of its global sales by 2025.

Last year, Eichhorn said Volkswagen would need to source 150 gigawatt-hours worth of battery cells to meet its goal. He's since increased that estimate to "more than 200 gWh," Automotive News reports.

Battery production may prove to be one of the biggest hurdles to mass adoption of electric cars. While established automakers have resisted building large amounts of electric cars for some time, factors like tightening global emissions standards, the success of Tesla, and, in Volkswagen's case, an emissions-cheating scandal have changed their attitudes. But the batteries to power all of these new electric cars have to come from somewhere.

The lithium-ion battery business is more or less dominated by three companies: Samsung, LG, and Panasonic. But a massive increase in demand from the auto industry could bring in other players. More automakers could follow Tesla's lead and build their own battery plants, or other suppliers may rush in to fill the vacuum. Several Chinese companies are currently building large lithium-ion battery plants, and Bosch is reportedly mulling large-scale lithium-ion production as well.

If they can meet demand, the mass deployment of electric cars could be as good for battery makers as it will be for the environment.