FRANKFURT, Dec 1 (Reuters) – European battery cell factories planned by Volkswagen (VOWG_p.DE) and securing vital raw materials will cost up to 30 billion euros ($ 34 billion), said Thomas Schmall , board member, putting a price on expansion for the first time.
Schmall, who is in charge of technology at Europe’s largest automaker, said in an interview with the Reuters Next conference that Volkswagen would seek outside partners to fund it.
“We are talking about 25 to 30 billion (euros) (…) including the vertical chain of raw materials, not just the factories,” said the 57-year-old, adding that VW would not have to take the lead in financing and was not aiming for a 50/50 investment split.
“It depends on the partnership model that we will establish in the coming months. We are open to discussing it. For us it is necessary that we can control … the technology roadmap, the schedule, the costs and the availability for enable our deployment. “
Schmall is overseeing Volkswagen’s ambitious plan to build six major battery cell factories in Europe by the end of the decade, a strategic pillar in its attempt to overtake Tesla (TSLA.O) and become the world’s largest seller of electric vehicles.
Swedish Northvolt, the first plant of which Volkswagen owns a fifth, will start production of premium cells for the German manufacturer from 2023. The second plant, which will be built jointly with Chinese Gotion High-Tech (002074.SZ) in Salzgitter , is due to start in 2025.
Four more factories will follow by the end of the decade, most likely in Spain, Eastern Europe and two other locations that have yet to be disclosed.
The costs will be € 1 billion to € 2 billion per plant while the capacity will range from 40 to a maximum of 80 gigawatt hours (GWh), depending on the chemistry and the availability of sufficient energy supplies, Schmall said.
“We have natural limits in the availability of utilities, energy, water,” he said.
But production capacity is only part of the equation, Schmall said, adding that Volkswagen also needs to make sure it gets enough raw materials, such as lithium and nickel.
This requires a more proactive approach and Schmall said Volkswagen is looking to enter into partnerships, with cooperation announcements expected “in a few weeks”.
Volkswagen, which plans to submit its next five-year investment plan to the supervisory board on December 9, is pursuing a mix of strategies, which could even include becoming a shareholder in a mining company.
“You will see the full range,” Schmall said, also referring to fixed and mixed price contracts with suppliers. “You must necessarily adapt the solutions to specific raw materials. “
It also requires ensuring that materials are sourced in a sustainable manner, which in Volkswagen’s case includes transparency reporting, supplier reviews, and efforts to phase out certain materials, notably cobalt.
Ultimately, Schmall said, the goal was to ensure the sustainability of the entire production chain, adding that electric vehicle production alone was not enough for Volkswagen, which aims to be neutral. in carbon by 2050 at the latest.
“And that brings us into this closed loop and hopefully you show that we take care from the very beginning, from the first step, from the extraction process, to being sustainable, right down to the last point in the life of the plants. batteries and cars and recycling, ”he said.
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