Volkswagen will expand EV production, signs battery contracts worth $25B

Dive Brief:

The Volkswagen Group wants to speed up the “Roadmap E” transportation electrification strategy unveiled last year, and has announced plans for more than a dozen new production sites for electric vehicles and massive contracts for the batteries which will power them.
Volkswagen currently produces electric vehicles at three locations, but this week said it would add nine more within two years, ultimately building 16 plants by 2022. The locations will are global, with specifics yet to be announced.
The company has also reached agreements with battery manufacturers for its markets in China and Europe, valued at $25 billion, and says a supplier decision for its North America production "will be taken shortly."

Dive Insight:

Volkswagen yesterday announced the company has signed contracts for an eye-popping $25 billion worth of batteries, marking a serious commitment to the evolution of transportation. Electrek.co called it a major step for a company whose EV efforts, so far, "mostly consist of press releases and concept vehicles." It also signals more competition for Tesla as this company steps into the EV space.

In September of last year, VW announced it would be bringing 80 new EV models to customers by 2025. At the time, the company said capital expenditures would be "ramped up," with over $25 billion "earmarked for the industrialization of e-mobility." The company also outlined its battery strategy, saying it expected global orders valued at more than $62 billion by 2025. By 2030, the company plans to offer electric models of all of its vehicles.

Volkswagen CEO Matthias Müller said in a statement that the company has "pulled out all the stops" to implement its Roadmap E strategy. "This year, another nine new vehicles, three of which will be purely electric-powered, will be added to the Group’s electric portfolio of eight e-cars and plug-in hybrids."

All of this will require a strategy for sourcing batteries, and VW said its new agreement "to ensure adequate battery capacity for the massive expansion of environmentally-friendly electric mobility." The company says it has agreed to partnerships with battery manufacturers for markets in Europe and China, and the contracts "already awarded" total about $25 billion. However, the company said they will make a supplier decision for North America "shortly."