Plentiful supply

After Dieselgate, VW Presses Search for Batteries

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VW's electric Golf was unveiled last year. Picture source: Reuters

With Volkswagen under pressure to transition to electric vehicles, which has gained momentum since the Dieselgate scandal erupted, the company has stepped up its search for sources of lithium, the metal at the heart of electric car batteries.

By 2020, the company reckons it will be producing thousands of electric cars. Thanks to the diesel scandal, owners of VW diesel cars can now get a price reduction of nearly €12,000 euros ($14,000) on a new E-Golf. At last year’s Paris auto show, VW said it expects the electric Golf to be capable of driving 300 miles on just one 15-minute charge.

If these predictions prove accurate, VW as well as other manufacturers will have to ramp up their search for lithium, which is used to make the lithium-ion batteries found in most cars. In addition, where will it get all those batteries?

“In order to remain on the same level as other manufacturers, strategic partnerships as well as joint manufacturing will prove sensible.”

Thomas Sedran, Strategy manager, VW

Thomas Sedran, VW’s strategy manager, said the company expects global demand for lithium to triple between now and 2025. It is now mined in salt lakes, but the huge increase in demand may force suppliers to start mining lithium in actual mines, where deposits are easier to extract.

Luckily, Mr. Sedran said, lithium is fairly plentiful and available from politically stable countries such as Argentina, Chile and Australia, so there are not likely to be any limitations on exports.

The next question is whether VW will start making the batteries itself, as does the famed Tesla company in California, or simply buy them from suppliers such as Korea’s LG and Samsung or Japan’s Panasonic.

“Battery cell manufacturing is very knowledge and labor intensive,” Mr. Sedran said. “Battery technology is now a core competency of our group and in order to remain on the same level as other manufacturers, strategic partnerships as well as joint manufacturing will prove sensible.”

China is also another big investor in lithium-ion batteries. Mr. Sedran said that from next year, VW will be making a mass-market electric car in China in a joint venture with Chinese manufacturer JAC.

The company is also investing in what he called solid-state batteries, which he described as the next generation of batteries with 30 percent more storage capacity than lithium-ion batteries.

 

Stefan Menzel reported this story for Handelsblatt. Charles Wallace adapted this story to English for Handelsblatt Global. To contact the editor: s.kimball@extern.handelsblatt.com

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