VW's Battery Unit Confronts Supply-Chain Challenges as It Prepares for IPO
The newly established battery division of Volkswagen Group is attempting to tackle supply-chain challenges as it increases production and gets ready for an IPO.
According to the unit's Chief Financial Officer, Kai Alexander Mueller, PowerCo, which coordinates the automaker's global battery activities, is attempting to source raw materials despite rising pricing and logistical challenges.
Volkswagen plans to collaborate with Umicore to procure cathode materials, is considering a partnership with Robert Bosch for machinery, and has committed to purchasing battery-grade lithium hydroxide from Vulcan Energy Resources.
“The supply chain for our business simply does not exist today,” Mueller said. “What is important is working with suppliers to scale this industry.”
In a rush to electrify their lineups and catch Tesla, the world's leading seller of electric vehicles, automakers ranging from Volkswagen to General Motors are evaluating alternative business models.
Europe is attempting to establish a domestic battery sector to compete with Asian supplies.
PowerCo, which began ground last week on its first European factory, anticipates investing more than 20 billion euros ($20 billion) in five of its cell factories by 2030.
In collaboration with Northvolt, Volkswagen is constructing a sixth facility in Sweden.
According to the firm, Volkswagen's flagship battery plant in Salzgitter, Germany, will be able to generate 40 gigawatt-hours of cells annually, enough for around 500,000 electric vehicles.
Last year, Volkswagen constructed a laboratory in Salzgitter to study, develop, and test electric vehicle (EV) batteries. Salzgitter is home to VW's primary motor plant.
VW remains open to a public offering of its battery unit after financing it internally and recruiting strategic partners, VW CFO Arno Antlitz said last month, adding that this process will commence in 2019.
PowerCo is intended to consolidate Volkswagen's battery-making operations in much the same way as its Cariad unit attempts to streamline software development. It will oversee the acquisition, processing of raw materials, product creation, and plant management.
“We are starting from the beginning to cover all aspects, from the mine to the end product,” Mueller said. “We need to understand the sourcing, and pricing to have a competitive product.”
Source: Automotive News Europe
