Published: Wed, March 14, 2018
Global | By Marsha Munoz

VW secures $25B battery supplies in electric-car push against Tesla

VW secures $25B battery supplies in electric-car push against Tesla

To ensure adequate battery capacity for the expansion of environmentally-friendly electric mobility, partnerships with battery manufacturers for Europe and China have already been agreed.

Volkswagen says it has the financial resources for its electric strategy, with net liquidity of 22.4 billion euros at the end of 2017 despite billions in cash outflow from the diesel crisis. "This is how we intend to offer the largest fleet of electric vehicles in the world, across all brands and regions, in just a few years", stated Matthias Müller, CEO of Volkswagen AG.

With the powerpack deliveries secured for its two biggest markets, a deal for North America will follow shortly, Volkswagen said.

The plan, previously dubbed "Roadmap E", is to produce up to 3 million electrified vehicles per year by 2025, with no fewer than 80 electrified models spread throughout its dozen-strong brand lineup, a portfolio that includes VW, Audi, Porsche and Bugatti, among others.

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To accommodate production, Müller said the company will adapt nine production sites to handle electric-vehicle production.

It's more than the $84 billion (81 billion euros) investment in electric cars and batteries that they plan to make over the same period. That was just months after it promised to spend 20 billion euros (about $25 billion) on EVs and self-driving cars.

From 2019, Müller insisted, the Group that owns Porsche, Audi, Bentley, Lamborghini, Seat, Skoda and Bugatti would launch a new electric auto "virtually every month". Only three of its plans now produce electric cars. Tesla is reported to have sold 102,807 electric cars in 2017, mainly high-end models.

The efforts will also support Volkswagen's rollout of its Modular Electrification Toolkit (MEB) platform. The first model will be the Neo hatchback that goes on sale in 2020.

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Volkswagen's move represents a bold attempt to dominate the EV market, but it still faces stiff competition as carmakers move away from initial hesitancy towards EVs.

"This is not one of our core competencies", said Mueller, who has faced pressure from employee representatives to invest in battery-cell production. Ford Motor (F) will launch 13 electric models over the next several years.

"There will be a coexistence between internal combustion engines and electric drive systems for a certain period - I can't tell you how long that will be", Mueller told the BBC in September.

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