Car manufacturers are now battery manufacturers
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Battery technology will decide the winners and losers in the automotive industry of tomorrow.
If you think that’s a dramatic statement, take a look at German auto giant Volkswagen’s two-hour event “Power Day,” which kicked off Monday morning. It was a deep (deep!) Tesla-style dive into Volkswagen’s global plans for the development and manufacture of battery chemistry.
“Our goal is to establish a leading position in global battery sizing,” said Volkswagen CEO Herbert Diess to kick off the show, which featured a battery enthusiast’s fun of charging patterns. anodes and cathodes, cutouts of battery cells and plans for future battery factories.
It hasn’t always been that way. Historically, automakers have devoted most of their efforts to the design and manufacture of the vehicles themselves, and left the problem of power supply to the suppliers of gasoline and diesel fuel.
Our goal is to establish a pole position in the global dimensioning of batteries.
But as more and more automakers commit to shifting all of their businesses towards electric vehicles, many are also investing more and more in chemistry and manufacturing their own power supplies, that is, ie the battery. At the Consumer Electronics Show earlier this year, General Motors also devoted a lot of time to an introductory presentation devoted to the technical aspects of battery chemistry and development.
Tesla was the first automaker to start doing this years ago thanks to its core partnership with Panasonic and its investment in a battery “gigafactory” in Nevada and later elsewhere. Tesla’s playbook could be seen throughout the Volkswagen event – from the German company’s use of the word “gigafactory” to its battery-cell architecture.
It’s no surprise that Volkswagen is following suit. Following the diesel emissions scandal, the company pledged to electrify its entire lineup and announced that it would stop developing combustion platforms after 2026. Volkswagen delivered 134,000 vehicles last year. all electric in its ID range, an increase of 197% compared to the previous year.
Volkswagen is actually in a better position than Tesla years ago – with its Silicon Valley funding mishmash, government loans, and CEO personal investments – to take such a big leap in batteries. Volkswagen generates hundreds of billions of dollars a year in internal combustion vehicle sales, and battery manufacturing is a capital intensive business.
During Power Day, Volkswagen highlighted a few key partnerships that it hopes will help it achieve its battery goals. These battery partners include Northvolt, a Swedish battery maker, and QuantumScape, a Silicon Valley battery developer.
On Monday, Northvolt announced a $ 14 billion battery order from Volkswagen over the next 10 years. This is huge, especially since Northvolt is essentially a startup.
And this is proof that Volkswagen will not be able to achieve this colossal electrical transformation on its own. It will have to invest in as many external innovations as it can find around the world. Collaborating with these types of new and high-risk businesses will be a challenge.
But there is no going back now. As the CEO of Volkswagen said to kick off Power Day: “Electric mobility has won the race.