Volkswagen Plans $11 Billion Battery Factory
Humiliated by its diesel emissions cheating scandal and facing billions of dollars in fines, penalties, and civil liability claims, Volkswagen has had an epiphany. Where once it thought turbodiesel engines would propel it to the top of the heap among the world’s automakers, it now has decided battery electric and plug-in hybrid cars are the one true path to salvation.
According to Handelsblatt, Germany’s respected business newspaper, the Volkswagen board will vote on June 22 on a proposal to invest $11 billion in a dedicated battery making factory in Salzgitter where it currently manufacturers internal combustion engines.
The newspaper says VW wants to be independent of the world’s principal battery makers — Panasonic, LG Chem, and Samsung. It offered no details on what battery chemistry Volkswagen will use to produce its batteries.
Volkswagen’s new head, Matthias Müller, says he and his team are working on a new strategy to dig the company out from under the diesel emissions cheating mess that has left it humiliated and demoralized. The plan calls for producing 1 million electric and plug-in hybrid cars annually by the year 2025. That is 5 years after Elon Musk says Tesla Motors will accomplish the same feat.
The Volkswagen strategy relies heavily on the new MEB modular chassis it has developed for the BUDD-e electric car unveiled at CES in January. The new platform will support both all electric and plug-in hybrid powertrains, allowing Volkswagen to adjust rapidly to changing customer expectations.
The fallout from the diesel cheating scandal has already trimmed the company’s share price by one third. It could cost the company as much as $30 billion to resolve all claims outstanding worldwide as a result of it. Authorities in the US and Korea are still considering possible criminal charges against the company.
Adding an $11 billion investment on top of all that is a bold, even daring move. But the Volkswagen board may believe the company has no other choice if it wishes to claw its way back to the top of the global automobile business.
Source: Quartz Photo credit: Volkswagen