The race to dominate the electric vehicle industry may be getting narrower as Volkswagen, the German car giant approaching Tesla, unveiled plans on Monday to reduce the cost of batteries and operate a wide range. charging network.
On his first “Power Day,” which recalls the TSLA of electric car maker Tesla,
the famous “Battery Day,” the German group that owns the Volkswagen, Audi and Porsche brands, said it would rely on six giant factories in Europe to secure supplies as the industry faces an impending shortage.
Shares of the Volkswagen VOW group,
VWAGY,
VWAPY,
rose about 3% on Monday as the company’s top executives outlined a roadmap for technology expansion.
Electric vehicles have become the “main business” of the company in Wolfsburg, Germany, said Herbert Diess, chairman of the group’s board of directors, and his new plans come as he warms up. space for fast-growing electric vehicles.
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According to UBS analysts, electric vehicles could achieve 100% penetration in the car market by 2040. Over the next few years, the Swiss bank projects that Volkswagen and Tesla will emerge as market leaders, with the forecast that the German company catch up with Tesla. in terms of total volume of electric vehicles sold as early as next year.
Volkswagen drove Tesla out of its first place in the European electric vehicle market in 2020 and now has a market share of 20% to 25% in this key region. Europe is the second largest electric vehicle market in the world after China, which hosts domestic electric vehicle manufacturers, including Nio NIO,
XPeng XPEV,
and the WORLD 1211,
As automotive companies face electric mobility across the sector, UBS said it expects the supply of battery cells needed to fuel demand will face “regional rigidity this year and global shortage in 2025 ”.
To secure the batteries needed for the expansion, Volskwagen said it will depend on six gig factories in 2030. The first factories will be in the Swedish cities of Salzgitter and Skellefteå, where Volkswagen is building a factory with partner Northvolt.
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Northvolt said Monday it had received a $ 14 billion order from Volkswagen for premium battery cells. The German group also increased its stake in the Swedish company, founded by a former Tesla employee with sponsors such as Goldman Sachs GS,
and Spotify SPOT,
Chief Executive Daniel Ek.
In addition, Volkswagen said it will try to reduce the cost of batteries by up to 50% (the key factor in reducing the total cost of vehicles) over the next decade.
Savings of some kind will be seen from 2023, Volkswagen said, when the group plans to launch a new unified battery cell that will be installed on 80% of its electric vehicles by 2030.
“Our goal is to reduce the cost and complexity of the battery and at the same time increase its range and performance,” said Thomas Schmall, a member of Volkswagen’s technology board and head of its technology roadmap. “This will ultimately make electronic mobility affordable and transmission technology dominant.”
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To support the widespread adoption of electric vehicles by consumers, Volkswagen plans to increase the European vehicle charging network by five in 2025. In the coming years, the company aims to operate 18,000 public fast charging points. , including 8,000 in collaboration with BP BP oil,
Volkswagen will build another 3,500 recharging points in North America by the end of 2021 through its US subsidiary, Electrify America, as well as 17,000 recharging points in China in 2025 through a joint venture.
Automotive analyst Matthias Schmidt told MarketWatch that “giant” manufacturers like Volkswagen are slowly waking up and starting to show that size is important when it comes to an electric future [that] regulation forces them to enter “.
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European vehicle manufacturers are being pushed to manufacture more electric vehicles by the threat of hundreds of millions of euros in fines from the European Union for binding fleet emission targets.
The race for the transition to electric mobility is also supported by demand, as many European governments offer thousands of dollars in tax credits and subsidies for consumers to choose electric vehicles.
“VW is announcing a major cost advantage by increasing production, deciding to integrate vertically to help reduce BEV costs on the road to price parity, which is crucial once the subsidy build is slowly being phased out,” said Schmidt, who is also the editor of European Electric Car Report.