VW assessing its position along the whole EV supply chain

Jan 30, 2019

  • VW has been making statements in the past week highlighting its intention to strengthen its position in the EV supply chain. These announcements have come from its newly formed components division, which consolidated its various disparate procurement and development functions from the start of this year.
  • This new team aims to save the company €2bn by 2025 in cost efficiencies, which it has pledged to invest in e-mobility. It will also have responsibility for ensuring supply for the company’s EV batteries, as well as recycling and/or re-purposing batteries at the end of their useful automotive life.
  • The three key announcements made by the company give a indication of the scope of its ambition regarding electrification, as they cover charging, cell manufacture and even investments in mining of raw materials.
  • Moving upstream one announcement at a time, VW has said that it will begin production of ‘powerbanks’ capable of charging four vehicles simultaneously, with a pilot project being launched in Wolfsburg this year, and mass roll-out planned for 2020. There are even plans for second-life use of automotive batteries within these charging stations.
  • VW has also indicated that it is weighing up a move into cell production for its EV batteries, having stated that it is in intensive talks on the subject. This follows the news of the Toyota-Panasonic tie-up last week – if you missed our take see here. We expect that this is the likely direction of travel for automotive majors, and sooner rather than later, given the potential costs of not securing supply, and their current position of strength in a market that requires investment.
  • What is perhaps even more interesting is that the company has said that is also considering investing in key raw materials for its batteries, including through taking shareholding positions in mining companies. Given the resources at VW’s disposal, and the relatively small investments necessary to secure off-takes with many of the mining companies in the battery raw materials space, this could have a significant impact on the markets for those minerals.

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