German automotive manufacturer Volkswagen AG is ramping up its push for mass-market electric vehicles with plans to create new joint ventures with battery suppliers. The Berlin-based company announced that it will establish partnerships with suppliers to help it get the batteries it needs for its planned electrification.
The company mentioned that it plans to buy more than $56.57 billion worth of battery cells in the coming years for the new fully-electric models it has in the works. Volkswagen stated that it has already identified key partners, which include Sweden's Northvolt, China's CATL, and South Korea's SKY, LG, and Samsung SDI.
Hampering its ambitious plans are some manufacturers who are apparently still very skeptical about the future of electric automobiles. VW board member Stefan Sommer told reporters that the company is now actively convincing suppliers of the potential and opportunities that will be coming with electrification.
Some suppliers are apparently still hesitant to invest in electric mobility. Most of the companies, who are currently producing battery cells for electronic devices such as smartphones and laptops, are apparently not ready to go all-in with large scale vehicle battery production.
According to Sommer, some suppliers are hesitant because of the apparently slow adoption of electric vehicles globally. The company blames the slow development of accompanying technologies and the lack of charging infrastructure for the slowed adoption.
VW stated that for there to be widespread adoption of electric vehicles, companies must find ways to significantly increase operating ranges and shorten recharging times.
To help minimize its supplier's risk, VW is providing its finances and expertise through partnerships. The company is prepared to share the risk of installing new production facilities by establishing them through a joint venture.
Establishing a joint venture with its suppliers will also allow VW to closely monitor progress, essentially allowing it to step in to rectify any problems before it gets worse.
Volkswagen estimates that it will likely need more than 150 Gigawatts hours worth of batteries for its European business and another 150 Gigawatts hours for its Asian operations by 2025.
The company also mentioned that the requirement will likely double by 2030 as it full transitions to an all-electric product line.
The company is slowly working towards its planned transition, with the retooling of 16 of its factories to build primarily electric vehicles. The automaker plans to roll out around 33 new fully-electric models by 2023 under its various brands, including Skoda, Seat, VW, and Audi.
While it does have battery suppliers in China, VW hinted that it might one day build its own battery manufacturing facility in the country if its demand in the region increases.