Going Huge on Electric Vehicles
The German car company announced plans to build as many as six “gigafactories” across Europe as it aggressively moves into the EV sphere. These six EV plants will have a total production capacity of 240 gigawatt-hours per year.
“E-mobility has won the race. Our goal is to secure a pole position in the global scaling of batteries,” Volkswagen Group CEO Herbert Diess said.
The car business said it plans to construct its first two plants in Germany and Sweden. Moreover, the company has committed to dramatically increase the number of new EV charging stations to networks across Europe, the United States (US), and China.
In this context, the German business presented an ambitious plan to operate about 18,000 public EV charging stations in Europe by 2025, which is an increase of 400% compared to the 3,600 charging stations it currently operates.
In North America, the company’s subsidiary “Electrify America” will operate around 3,500 fast-charging stations by the end of the year. In China, the car business is looking to operate a total of 17,000 EV charging stations by 2025.
The company will also start working on a new unified battery cell that is due to be launched in 2023. The plan is to use the new battery system in up to 80% of EV models going forward. Up to 95% of raw materials used in these batteries will be able to be reused. Startup Savant reported yesterday that Northvolt, a Swedish battery company, recently received a $14 billion purchase order from Volkswagen for EV batteries.
"The one size fits almost all cell design will radically reduce battery costs ... by up to 50% compared to today. Lower prices for batteries means more affordable cars, which makes electric vehicles more attractive for customers,” Deiss said at the event.
Deiss also provided an update on the company’s overall performance in 2020. While the business had a “good” 2020 year, the Chief Executive presented upgraded business profit targets. Volkswagen is projecting to reach an operating margin of 7% and 8% after this year. For 2021, it is looking to finish the year in the upper part of the provided range of 5% to 6.5%.
Shares of Volkswagen surged 8% in European trading today.
The German car business presented ambitious EV plans as the company intends to become one of the leaders in this industry through efforts such as adding EV charging stations and committing to a new EV battery system. Moreover, the company upgraded its profitability targets to send its shares higher.
About the Author
Mariliana has an MSC in Consumer Analytics and Business Strategy. She has a special interest in fast-moving industries and Big Data.