Volkswagen (VWAGY) will bring EV batteries in-house and set a timeline for switching to solid-state batteries, sharpening its challenge to Tesla (TSLA). Volkswagen stock rose.
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The world’s second largest automaker by sales outlined a significant new EV roadmap Monday, focusing on batteries and charging technology.
By 2030, the German auto giant will set up six “gigafactories” for battery cells in Europe, relying on both partnerships and the expansion of in-house production.
Volkswagen also will hike investment in Sweden’s Northvolt, its leading supplier of battery cells, including a $14 billion order over the next decade. The plants will have a combined production capacity of 240 gigawatt hours per year, VW said.
Eventually it eyes solid-state battery cells by the middle of the decade. In the meantime, VW unveiled a cell that helps bridge the gap. “The new prismatic unified cell also offers the best conditions for the transition to the solid state cell — the next quantum leap in battery technology … .”
The prismatic unified cell will launch in 2023 and could slash battery costs in half, Volkswagen said.
Solid-state batteries could transform electric cars with fast recharging times, lower costs and increased battery life, thereby removing obstacles that have held back the mass adoption of electric vehicles.
Volkswagen has partnered with solid-state battery maker QuantumScape (QS) for nearly a decade. In 2018, the companies set up a joint venture to make solid-state batteries and VW now owns a stake in the California-based company.
QuantumScape appeared to achieve a major breakthrough in developing solid-state lithium metal batteries. The batteries promise to be safer and cheaper, have a longer life span, charge faster and have more energy density than existing lithium ion batteries.
On Feb. 16, the company revealed it can produce multilayered battery cells. Its four-layer battery is still short of the 12 or so needed to be commercially viable. But the company is confident enough in its ability to make progress that it decided to build a “pre-pilot” production facility to make “enough batteries for hundreds of long-range battery electric test vehicles per year” by 2023.
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Volkswagen Stock, QuantumScape Stock
U.S.-listed Volkswagen stock rose 7% to close at 29.76 in Monday’s stock market trading, well above the 10- and 40-week lines. Tesla stock rallied 2% and QuantumScape stock climbed 6.8%, rallying further above the 10-week line. EV battery stock Romeo Power (RMO) added 2.2%.
Top U.S. automaker General Motors (GM), which plans to bring more battery production in house as well, eased 2.2%.
Volkswagen eyes one of the most ambitious pivots to electric vehicles among legacy automakers, in Tesla’s wake.
Last November, VW hiked its planned investment on digital and EV technologies to 73 billion euros ($86 billion) over the next five years, up from 60 billion euros.
On Monday, Volkswagen also announced plans for a vast expansion in EV charging infrastructure. By 2025, it sees 18,000 public fast-charging points in Europe, a fivefold expansion vs. today.
In addition, Volkswagen will deploy fast-charging points at gas stations run by Great Britain’s BP, Spain’s Iberdrola and Italy’s Enel. It’s also expanding public fast-charging networks in the U.S. and China.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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