Volkswagen chases Tesla into the battery business to enable its EV shiftVolkswagen chases Tesla into the battery business to enable its EV shift

Monday marked a coming-of-age moment for electric vehicles and the “legacy” auto industry. Volkswagen, which each earlier announced plans to make 28 million EVs and 70 distinct fully electric models by 2028, changed course to become a battery maker. 
VW’s Power Day announcements focusing around battery and charging technology could suddenly put the company on different terms with LG Chem, SK Innovation, Samsung, and CATL—all companies VW planned to tap for cells for years prior to Monday’s news. 
Although the company will likely continue to source those cells for many years of production, it laid out a $29 billion, big-picture plan of what comes next: its own cell-making gigafactories, its own format and chemistries, and corresponding plans to get even more involved with charging and its potential. 
“E-mobility has won the race,” said CEO Herbert Diess. “Our goal is to secure a pole position in the global scaling of batteries.”
VW Power Day – battery mix
If not an about-face, it’s a noteworthy pivot from the messaging that’s been coming from VW Group’s brands during the five years or more of development of the current crop of electric vehicles. That crop ranges from the affordable VW ID.4 to the premium Audi E-Tron SUV and up to the high-performance Porsche Taycan. Up until now, the company made clear that it planned to share expertise with suppliers but use the best commodity cells it could buy as a starting point, applying its own engineering expertise to all the building blocks above that. 
VW now sees the cells inside the battery pack—not just the pack itself—as a core competency. Like GM with its Ultium strategy, the German automaker plans to focus on one particular unified-format prismatic lithium-ion cell type, starting as soon as 2023 and destined to power about 80% of the company’s EVs by the end of the decade. 
While it might seek a series of partnerships with suppliers, the “closed loop” approach it outlined for first and second uses, along with recycling, appears to much more rigidly lay out what it seeks from the relationship. For instance, one of the first plants, in Salzgitter, Germany, will be developing “innovations in process, design and chemistry.”
Volkswagen didn’t explain exactly what its unified lithium-ion cell will contain, but it did run through some key considerations that suggest the direction.  
VW Power Day – battery types
VW noted that the cathode is the control lever for sustainability, cost and range (nickel, manganese cobalt). At present, high manganese cells are promising because their nickel content is lower and cobalt is no longer needed in the cells. 
On the anode side—the control lever for performance—VW pointed to the use of synthetic graphite for improved performance and charging time, with the introduction of silicon playing a role in boosting range by about 10%.
About 20% of the group’s vehicles won’t use those unified cells. Frank Blome, the head of battery cells at VW Group, said that LFP (iron phosphate) cells are promising “for cars with low range,” so such cells might end up in city cars. 
The solid-state technology VW is working with QuantumScape to bring to production around 2025 or later—likely in very small volume at first—is seen as “the end game.” 
VW Power Day – fast charging
While the current 80% fast-charge times of about 25 minutes will be cut to 17 minutes in the interim—likely with that unified cell and the tech surrounding it—the solid-state tech leap will enable fast-charging in 12 minutes.
Markus Duesmann, chairman of the board of management, Audi AG, gave an update on the Artemis project, which will deliver both a next-generation EV and a series of corresponding, reimagined digital services by late 2024. 
He confirmed that the model, with “serial development” now starting, will be good for long-distance travel, and will be the first one to feature the new unified battery.
What underpins the model will also be the debut platform for Cell2Pack, the group’s new standard for skipping separate modules and packaging cells independently within the pack 
VW Power Day – battery types
Porsche chief executive Oliver Blume said during a different part of the presentation that Porsche will build up production know-how for performance cars for the group, focusing on silicon as a main anode material for its reduced internal resistance, new electrolytes and additives. Other aims will be to optimize the cell design for less internal resistance. 
VW Group’s shift to greater control over the cells is one that some analysts have seen coming for a long time, as CEO Herbert Diess repositions VW to be more of a tech company, and it puts more credibility behind the company’s targets. Last year the consulting firm Wood Mackenzie cried foul, noting that to sell its 22 million EVs by 2028 VW would need to procure 57% of the world’s EV battery production—”something that would prove to be extremely challenging,” the firm noted. Going back as early as 2017, however, a VW executive estimated that VW would need something on the order of 40 gigafactories by 2025. 
Volkswagen battery recycling
One of the central themes behind Tesla’s Battery Day last year was that it expected shortages in lithium-ion cells that would potentially keep automakers from meeting demand starting in 2022; that’s one of the sparks spurring Tesla’s own production, as well as a new cell format that would be easier to produce. 
Volkswagen now plans a series of gigafactories to meet its volume—with six of them (Spain and Poland are already contenders for future plants) adding up to 240 GWh annually just for Europe, by the end of the decade. At this stage of the ramp-up to electric, building from the bottom up sets a more certain course for realizing its ambitious targets. 

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