This comes after rival companies Tesla and BMW have already struck supply deals with producers of lithium and are also on their own roadmap to accelerate EV production and reach the top
German automotive manufacturer Volkswagen is accelerating its entry in the expanding electric mobility market as it is in talks with battery materials suppliers to secure direct access to raw materials for electric vehicle batteries via partnerships, board member Thomas Schmall revealed.
According to a Reuters report, Volkswagen is trying to exert more control over key components in its supply chain such as semiconductors and lithium so it can overcome any potential bottlenecks and keep its plants running at full capacity,
“Apart from cell manufacturing, which is a new area of business for us, we need to move into vertical integration more strongly, procuring and securing raw materials. This can happen via various forms of cooperation,” said Schmall, who is Volkswagen’s board member in charge of technology.
Gaining direct control over the supply of raw materials for EV batteries – which also include graphite, cobalt and nickel – is also vital to get a better handle on costs, Schmall said.
“80 per cent of cell costs are determined by raw materials. So it’s obvious that one needs to be more engaged.”
While Schmall did not identify potential suppliers, he said Volkswagen’s goal was to have a small number of larger players to keep complexity under control.
Citing sources, Reuters said that Volkswagen is seeking closer ties with Germany’s BASF, one of the world’s largest suppliers of battery materials.
This also comes after rival companies Tesla and BMW have already struck supply deals with producers of lithium, one of the main components in EV batteries, and are also on their own roadmap to accelerate EV production and reach the top.
This has been an awakening call for the carmaker, which aims to overtake EV giant Tesla in the EV race by mid-decade and has charted out a plan to build six battery plants across Europe by 2030 to achieve this.
Schmall said Volkswagen was very close to picking a partner for its planned battery factory in Salzgitter and hoped to give more details in the coming months, adding that all six factories would include strategic partnerships.
Volkswagen is also trying to get closer to chipmakers in the face of a global shortage of semiconductors, highlighting the multiple fronts it must tackle with its 150 billion euro ($182 billion) spending plan.