Volkswagen has unveiled intentions to invest in mining operations, in an effort to eventually cut back on costs associated with the manufacturing of battery cells for its electric vehicles.
Keeping in line with Volkswagen’s broader strategy to posses stronger control over the EV battery supply chain, the European automaker is drawing up plans to enter the mining business, and solidifying partnerships with miners around the world. “The bottleneck for raw materials is mining capacity— that’s why we need to invest in mines directly,” said Volkswagen technology board member Thomas Schmall in a Reuters interview.
“In future, there will be a select number of battery standards. Through our large volume and third-party sales business, we want to be one of those standards,” he explained. Indeed, automakers looking to meet tightening emissions standards are faced with scarce raw materials, making it increasingly difficult to meet customer EV demand at an affordable price. Volkswagen, for its part, wants its PowerCo battery unit to eventually become a world-wide supplier of EV batteries, in addition to meeting half of its own demand across North America and Europe.
“Bringing down battery costs further is a challenge,” Schmall continued. “We’re using all the instruments with PowerCo.” Aside from Volkswagen’s ambitious plans to vertically integrate the extraction of raw materials for auto-manufacturing, Tesla is currently the leading company pledging the most investment into EV battery production. According to Volkswagen’s five-year spending plan, the carmaker has earmarked as much as 15 billion euros towards its three previously-announced battery plants, including some raw material sourcing.
Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
