VW Will Make Its Own Batteries to Power an Electric Future
05.15.2019  Alex Davies

The production line for electric vehicles inside a Volkswagen factory. The
automaker plans 70 electric models by 2028  / Jens Schlueter/Getty Images,c_limit/transpo-vw-golf.jpg
The electric Golf GTE Sport concept is just one image of Volkswagen's
future, as the automaker moves away from fossil fuels  / Volkswagen

Four years after getting caught cheating emissions standards with millions
of diesel-powered cars, Volkswagen has become the most (outwardly, at least)
zealous of converts to an electric future. By 2028, it intends to offer 70
battery-powered models. To make that happen, it’s retooling 16 factories to
build electric cars. It’s pushing suppliers to ramp up battery production
and has already locked in battery supplies for 15 million vehicles, CEO
Herbert Diess told Automotive News late last year—a huge number even for a
company that builds 10 million cars annually. But the conversion hasn’t been
entirely smooth. Last month, reports surfaced that VW luxury arm Audi will
build 10,000 fewer electric E-tron SUVs than expected, because of a battery
Alex Davies covers autonomous vehicles and other transportation machines for

Now, Volkswagen is taking some of the battery building burden in-house. It
will spend nearly €1 billion ($1.12 billion) to build a production plant
near its German headquarters, working with an unnamed partner, it announced
Monday. Where most automakers either buy battery packs from suppliers or buy
cells and make them into packs, VW is getting involved in the production of
the cells themselves. The company offered scant details on when the plant
will come online or what capacity it will offer. But this is a bold move for
an automaker that, whatever its past sins, seems set on dominating an age
built around batteries.

VW isn’t the only automaker betting big on electrics. General Motors, Ford,
BMW, Mercedes-Benz, Volvo, and others have announced plans to introduce a
bevy of new EV models in the next few years. That’s not counting a crop of
all-electric startups, many coming out of China, or industry stalwart Tesla.
While VW has the extra motivation of wiping the Dieselgate scandal from
public memory, the key driver is regulation. European countries like France,
the Netherlands, Norway, and the United Kingdom plan to ban the sale of gas
and diesel cars in the decades to come. So does India, a quickly growing
market. And China, the world’s largest car market, has some of the strictest
rules around electrics.

The point is, everyone’s getting into batteries, and VW wants to make sure
it will be able to get enough of them, even if it means making them itself.
In the near term, that may mean making sure suppliers can pump out enough
batteries, as the E-tron shortage makes clear. Looking five and 10 years
out, the concern may be more about ensuring that VW, and not its myriad
competitors, gets the batteries that are being made.

If all this sounds familiar, it’s because this is how Tesla operates. Since
2016, Elon Musk’s automaker, working with Panasonic, has been building its
own batteries at its Gigafactory outside Reno, Nevada. Last year, it hit a
production rate that, if kept up for a year, would have made 20
gigawatt-hours of battery power—enough for 200,000 top-of-the-line, 100-kWh
Tesla cars.

Whichever company is helping VW run its plant will likely play a key role.
That’s because building batteries for cars requires exquisite control of
materials and manufacturing. Many smartphones use one battery cell, so if
minor differences between two cells result in slightly different capacities,
it just means somebody gets a few more minutes of Twitter time than somebody
else. But even minor differences in the capacity or quality of the 500 or so
cells that make up a pack can undermine the performance or safety of the
entire vehicle. (Tesla uses smaller cells than most; its batteries contain
5,000 or more cells.) “Cells have to be identical from a quality
perspective,” says Jay Whitacre, who runs the Scott Institute for Energy
Innovation at Carnegie Mellon University. “Only the very best producers can
make lithium-ion batteries for automotive use.”

Still, there are enough producers—Panasonic, LG Chem, Samsung SDI, SK
International, and others—that this is a buyer’s market, Whitacre says.
Automakers can command rather low prices, which they’re eager to do for the
most expensive bit of an electric vehicle. The bigger concern for the
carmakers is locking down supply.

So it’s not surprising to see VW take some of that production into its own
hands. Building batteries in Germany, within a few hours drive of more than
half a dozen of its factories, should also save on shipping. The safety
concerns around shipping lithium-ion batteries can come with surcharges as
expensive as the batteries themselves, says Rebecca Ciez, a postdoctoral
fellow at Princeton’s Andlinger Center for Energy and the Environment.

Setting aside Dieselgate, Volkswagen became one of the world’s top
automakers with a reputation built on scale and efficiency. Now that it has
dedicated itself to going zero emissions, it’s doing everything it can to
adjust its know-how to a different kind of supply chain and manufacturing
process. This new plant is just one part of that. “With their global reach
and volumes, more than any other company on the planet, it makes sense for
them to build their own batteries,” says Karl Brauer, an industry analyst
with Kelley Blue Book. And maybe, ... rebuild a reputation tarnished by
diesel emissions, from the cellular level up.

+ (old fit ev pack repurposed)
AEP and Honda team up to find new use for old electric vehicle batteries
20190517  Honda joined forces with American Electric Power (AEP) this week
on a mission to give new life to used electric vehicle (EV) batteries and to
expand EV ...

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