Volkswagen Gigafactory

[Mookuh]

"VW to invest 8 Billion pound sterling in battery factory"

VW 'to invest £8bn in battery factory' in a bid to reinvent itself as electric carmaker

If this is more than just empty talk, we might see some developments rather soon. And Germany might actually enter the EV theater in earnest, not just talk about it as we currently do.


Not sure if this is the right sub-forum. If it isn't, please move.

 

[ecarfan]

From that article, quote: "A spokesman for VW described the report as “speculation”."

 

[fosking]

Please let this be true

 

[Mookuh]

Handelsblatt claims the usually ominous "corporate sources" as the wellspring of their info. Regardless, it's making quite a buzz in German media tho I'll spare you the articles in German.

Exclusive: VW Considers Building Own Battery Factory - Handelsblatt Global Edition

Edit: It's printed in most of the major German nbusiness news outlets and Handelsblatt is usually reputable enough to have *some* substance to what they're writing. Guess we'll see. It would make sense on a lot of levels. I wonder if they're going to strike many a deal with the government for the factory construction. A possible, speculated location is Salzgitter, which is close enough to Wolfsburg to be viable. And close enough to Sachsen-Anhalt to benefit from cheap East-German labour

 

[electracity]

Perhaps like the Tesla Gigafactory the VW proposals is a threat to battery suppliers: Ramp up to meet our needs or we will become competitors.

 

[tftf]

The first stage to announce something would be their 2025 strategy event in mid-2016:

VW to Publish New Strategy in Mid-June for Rebound From Scandal

But given the size of such a project I doubt they will go into all details already even if they seriously consider a (cell) factory.

As I wrote in another thread:

It doesn't take too many crystal balls to see which areas they will likely focus on:

• Autonomous driving (more R&D)
  
• Digital / Connected cars (along with new business models, see their recent investment in GETT: VW invests $300M in Uber rival Gett in new ride-sharing partnership )
• More Electrified vehicles

That's where every major car maker is investing in long-term.

The last bullet point could involve announcing a large battery factory in Europe (at least later on, maybe in a JV structure, who knows...).

It wouldn't be the first time a large car maker decides to vertically integrate battery supply, see Nissan since 2009 - years before Tesla announced their Gigafactory project:

Nissan spent billions on three large battery plants (located in Japan, Europe/UK and the U.S.) well before Tesla even started talking about a Gigafactory - including recycling and using spent EV batteries for ESS / local energy buffering later on.

It's not a "new" plan or strategy validation by Tesla to bring down costs or secure supply:

Nissan's New US Battery Plant Shows Major Dedication To EVs - HybridCars.com

(this is just a portrait of one of the three plants)

5 Facts About Nissan’s Battery Manufacturing Plant - The Equation

Nissan and Eaton power ahead with second-life battery system - Automotive World

But Nissan spent a lot of money so far without a clear ROI:

I was just pointing out that vertical integration and secondary use / recycling of EV batteries has been tried well before Tesla announced their Gigafactory or storage plans.

The Renault-Nissan alliance now leads EVs globally (and even more so thanks to the new 30% Mitsubishi Motors stake), but was all the vertical integration cap-ex worth it (especially since they are likely switching partners from NEC to LG and vertical integration makes it harder to switch battery technology partners...)?

Vertical integration in battery supply is a necessity to some degree, not an advantage.

Like DRAM or solar panels, this field is full of technology gaps and "pork cycles" for the next 1-2 decades, very low operating margins can be anticipated.

Just look at the history of DRAM, flash storage and solar panel makers over the past decades to get an idea where cell manufacturing is headed.

 

[miimura]

Nissan also got ATVM funding for their US battery factory. However, they did not vertically integrate anything about the cell manufacturing. They still buy all the materials like separators, cathode and anode material from outside suppliers. The lead time for those materials limits their ability to quickly change manufacturing rate.

 

[WannabeOwner]

In case of interest there's an article on Quartz yesterday:

VW may challenge Tesla for who has the largest advanced battery factory

 

[tftf]

VW CEO’s Strategy Overhaul Focuses on Electric Vehicles ‘Strategy 2025’ aims to boost profit and push aggressively into new technology services (...)

Volkswagen aims to achieve up to 25% of its annual sales with battery electric automobiles by 2025. That amounts to sales of up to three million battery-driven cars a year, up from just over 100,000 last year. The company aims to launch more than 30 new battery electric models over the next 10 years.

VW CEO’s Strategy Overhaul Focuses on Electric Vehicles

Executing this 2025 strategy will lead to announcements re battery sourcing sooner or later. VW will likely require 2-3 plants (Asia, NA, Europe) with or without cell partners (maybe JV or similar, see Nissan's example discussed above).

See PDF presentation of 2025 strategy for details. Slide 20 talks about 150 GWh of capacity:

http://www.volkswagenag.com/content.../Presse_englisch_NICHTanimiert_Version_24.pdf

From the speech:

This will also play a key role in another core initiative: establishing battery technology as
one of the Volkswagen Group’s core competencies. This policy decision has already
been made. After all, battery technology is the key to e-mobility. It accounts for 20 to 30 percent of value-added for fully electric vehicles.

We will need 150 gigawatt hours of battery capacity by 2025 for our own e-fleet
alone – which would make for a massive procurement volume. So the economic importance of this issue is plain to see. And the technological expertise would certainly bea good fit with the Volkswagen Group. Wewill examine in detail all strategic options for developing battery technology as a new
core competency for the Volkswagen Group.

 

[Vitold]

VW CEO’s Strategy Overhaul Focuses on Electric Vehicles

Executing this 2025 strategy will lead to announcements re battery sourcing sooner or later. VW will likely require 2-3 plants (Asia, NA, Europe) with or without cell partners (maybe JV or similar, see Nissan's example discussed above).

From the article:

“The fact is that we achieved the targets we set in 2007 ahead of schedule or were at least on the way to doing so when the diesel issue hit us.”
[...]
Mr. Müller’s new strategy revamps the 2007 plan instituted by Mr. Winterkorn, which set out to make Volkswagen the biggest and most profitable car company in the world by 2018. Volkswagen overtook Toyota as the biggest car maker by sales briefly last year and again in the first three months of this year.

It's interesting that VW is calling their dishonesty "the diesel issue" and is gleaming about achieving their goals ahead of schedule w/o realizing that they accomplished it by cheating their own customers and pollution.

 

[jbcarioca]

...


It's interesting that VW is calling their dishonesty "the diesel issue" and is gleaming about achieving their goals ahead of schedule w/o realizing that they accomplished it by cheating their own customers and pollution.

Regardless of that, many were calling on VW to make this decision and they appear to have done it. Now we'll see how well they execute.

 

[techmaven]

So... Tesla is right.

In order to achieve the volume scale up, automakers have to build their own battery plants or have joint ventures with battery cell manufacturers. Waiting for organic growth such that the battery cell manufacturers can grow in step with short term battery orders is not going to cut it for the massive transition yet to come.

We'll also see the carnage that this will cause the rest of the industry and VAG itself.

Now, 150 GWh is not 2 to 3 million BEVs. Likely there's a slew of PHEVs thrown into that. So that's how we can reconcile the earlier 1 million BEVs statement with this one, that about half this battery plant's capacity would be for BEVs, and the rest would be for PHEVs.

With Tesla's Gigafactory looking to be 100 GWh in the 2020-ish timeframe, 2025 looks to be very, very late. And VAG is the earliest of the automakers and they are likely around 3-4 years late.

 

[Vitold]

So... Tesla is right.

In order to achieve the volume scale up, automakers have to build their own battery plants or have joint ventures with battery cell manufacturers. Waiting for organic growth such that the battery cell manufacturers can grow in step with short term battery orders is not going to cut it for the massive transition yet to come.

We'll also see the carnage that this will cause the rest of the industry and VAG itself.

Now, 150 GWh is not 2 to 3 million BEVs. Likely there's a slew of PHEVs thrown into that. So that's how we can reconcile the earlier 1 million BEVs statement with this one, that about half this battery plant's capacity would be for BEVs, and the rest would be for PHEVs.

With Tesla's Gigafactory looking to be 100 GWh in the 2020-ish timeframe, 2025 looks to be very, very late. And VAG is the earliest of the automakers and they are likely around 3-4 years late.

Well VW claims that 2-3 million will be "pure electric":

Matthias Mueller, CEO of VW Group, said, “We expect that by (2025) we will be selling about 2 to 3 million pure-electric automobiles a year.”

 

[RubberToe]

The thing is, Tesla has quite a bit of the Gigafactory spending already behind it. At least enough to begin ramping Model 3 production. VW has that spending ahead of it. While at the same time having their diesel business castrated, and their higher end car sales being eaten into by Tesla. Even more so when the Model 3 comes out. They are going to have problems raising the cash to make it happen.

The mantra that "If Tesla can do it, we can do it" is often heard. The difference being that by the time any automaker starts producing as good a car as Tesla, along with a nationwide fast charging network, Tesla will already be Kleenex. Tesla will be so ingrained in the public's mind that they will be synonymous with EV's. People won't ask if you drive an EV, they will ask if you drive a Tesla. The game will be over for VW before the first battery rolls out of their first Gigafactory. Actually, the game is already over, they just don't know it.

RT

 

[tftf]

The thing is, Tesla has quite a bit of the Gigafactory spending already behind it.
RT

Quite a bit?

$508 million until Q2 2016 for Tesla and Panasonic combined is next to nothing in the context of millions of EVs.

As I discussed in other threads, Daimler will invest about $550 million into a mere expansion of an existing battery factory without any local cell production (which is the most cap-ex intensive process).

Large EV battery factories will require billions and billions for each factory, Tesla's investment so far is a drop in the bucket.

 

[Johan]

Quite a bit?

$508 million until Q2 2016 for Tesla and Panasonic is next to nothing in the context of millions of EVs.

Battery factories will require billions and billions for each factory, Tesla's investment so far is a drop in the bucket.

Cool. How much of the $8Bn rumored did VW invest already. Please answer with only a number, no text. Thanks. Hugs and kisses XXX.

 

[Jeff N]

Meanwhile, Toyota does nothing....

It's going to be interesting to see what kind of roadmap GM/LG cook up in response.

 

[techmaven]

Quite a bit?

$508 million until Q2 2016 for Tesla and Panasonic combined is next to nothing in the context of millions of EVs.

As I discussed in other threads, Daimler will invest about $550 million into a mere expansion of an existing battery factory without any local cell production (which is the most cap-ex intensive process).

Large EV battery factories will require billions and billions for each factory, Tesla's investment so far is a drop in the bucket.

Ironic that you think Tesla's expenditure is nothing, when everyone else's actual capacity is minuscule compared to what Tesla and Panasonic have, and will have in the near future. Between the Panasonic plants in Osaka and the Gigafactory investment thus far, the amount of infrastructure spend is roughly $2 billion. By mid 2017, the investment is going to be more like $3.5 billion with a resulting capacity of about 25 GWh. That's more than LG Chem + Samsung SDI + SK Innovations + AESC put together, by more than double.

 

[thegruf]

Thankyou Elon for your inspiration.

Your avowed aim was to migrate transportation to a more environmentally sustainable future.
Tesla is blazing the trail that others are being forced to seriously consider following.
Exactly the intention all along.

All is good. We get more competition, Tesla have to work even harder to keep ahead. Wha'ts not to like?

Who says one man can't change the world.

 

[techmaven]

Well VW claims that 2-3 million will be "pure electric":

While I do see that translation in a number of articles, the German article that TFTF pointed to doesn't say that. Neither does the PDF presentation given by VW.

Annual unit sales of 2 to 3 million e-cars by 2025, equivalent to 20-25 percent of total sales

The German article says:

Die Ankündigung ließ zumindest Großes hoffen: VW plant eine große Elektrifizierungskampagne und will bis 2025 mehr als 30 neue E-Fahrzeuge auf den Markt bringen.
Das jährliche Absatzziel beläuft sich bei den Stromern auf zwei bis drei Millionen Einheiten.

Google translate translates it to:

"VW planning a major electrification campaign and wants to bring more than 30 new electric vehicles on the market by 2025th. The annual sales target amounts for the streamers on two to three million units."

There is a quote further down that says, "... "Der Verbrennungsmotor wird allerdings nicht verschwinden.“ Insgesamt sollen die E-Autos 25 Prozent des gesamten Fahrzeugumsatzes ausmachen" which Google translate has as "... "The internal combustion engine is, however, not disappear." Overall, the E-cars will account for 25 percent of total vehicle sales."

Anyone that is a German native speaker want to chime in?