Seize the new energy track Volkswagen will build six battery factories in one breath

With the increasingly fierce competition in the new energy track, traditional car companies that "elephant turn around" also want to have "battery freedom". Volkswagen (Volkswagen AG) said on Monday that it would invest in six large battery plants and build electric vehicle charging infrastructure.

Volkswagen said it plans to increase its stake in two German plants and build four more battery plants in Europe by the end of the century, with a total capacity of 240GWh, and a fivefold increase in the number of high-speed charging stations for electric vehicles.

As a first step in the "power distribution" plan, Volkswagen said it would increase its stake in Swedish battery maker Northvolt AB and place an additional $14 billion battery order with the company by 2030 as a production base for high-end batteries for premium models.

Volkswagen formed a partnership with Northvolt in 2019 and had previously said it owned about 20 per cent of the company.

At the same time, Volkswagen plans to control its battery joint venture with Northvolt in Salzgit, Germany, through equity acquisitions to expand the plant and produce batteries for a large number of Volkswagen brands. Volkswagen said the move would save more than 50 per cent of costs.

"our goal is to reduce battery costs while improving battery range and performance," said Thomas Schmall, a board member in charge of technology and components at Volkswagen.

Tim Bush, an analyst at UBS (UBS), said that the lack of chips in the automotive industry may soon face the problem of chip shortages, thus limiting battery production. He said that Europe's battery supply may not be able to keep up with electric vehicle production this year, and European carmakers will need to rely on batteries imported from Asia in the coming years.

Big Asian battery makers for electric cars are building and expanding battery capacity in Europe. China's Ampere Technology is building a battery plant in eastern Germany, South Korea's LG Chemical has expanded its operations in Poland, South Korea's SK Innovation plans to build a third plant in Hungary, and China Honeycomb is building a plant in western Germany.

Electric carmakers are also increasing control over battery supplies. New car-building forces such as Tesla and Xilai Motors are actively promoting their battery plans. Tesla, for example, will add a battery factory in Berlin. In terms of traditional car companies, General Motors of the United States is at the forefront, and South Korea's LG Chemical is investing 2.3 billion dollars in a battery plant in Ohio, and recently said it is exploring the construction of a second plant.

Despite the increasingly fierce competition around batteries, Volkswagen's one-time official six-seat battery plant is still a big deal in the industry. The company also announced that by 2025, it plans to operate 18000 public fast charging stations in Europe, 17000 in China and 3500 in North America.

Volkswagen aims to at least double its market share in pure electric vehicle deliveries to 6-8 per cent this year, narrowing the gap with Tesla.

In early March, the Patrick Hummel team of UBS analysts published a report saying that if Tesla is the Apple of the electric car industry, then Volkswagen is the next Samsung, with "strong profitability and high sales volume".

The team said the platform cost, battery energy density and energy efficiency of Volkswagen's first pure electric vehicle ID.3 are as good as those of Tesla, with an estimated gross profit margin of about 15%, which is "by far the most credible electric vehicle launched by all traditional car companies."