Volkswagen CEO denies plans for EV battery plant

Volkswagen CEO denies plans for EV battery plant

Business news |
By Jean-Pierre Joosting

As recently as past May, reports circulated that Volkswagen might plan to build its own battery production in Germany  to be prepared for the wave of electric cars to be expected for the next decade and to become more independent from suppliers in the Far East. According to these reports, Volkswagen was considering the city of Salzgitter as the location for its battery production.

Now Volkswagen CEO Matthias Müller qualified these reports as “complete nonsense”. In an interview with business paper Handelsblatt, Müller said “we certainly won’t do such a nonsense”, referring to the reporter’s question if the company had any plans to fabricate their own traction batteries. Since battery production is a highly automated process, Müller ruled out that such a battery would create a significant amount of jobs. In addition, establishing such a production line would be “extremely expensive.”  Nevertheless, Müller left open a small backdoor for another reversal: The company is carefully investigating the entire battery production process chain, from the extraction of the raw materials to cell production, battery assembly and the integration of the complete batteries into the car. “Then we will see how far we will commit to this topic and invest”, Müller said, adding that the company will announce its battery strategy before the end of the year.

It is certainly a coincidence, but the same day Müller’s interview was published, Korean battery manufacturer Samsung SDI reportedly announced plans to establish such a production line in Hungary. According to news agency Reuters, Samsung SDI plans to invest about $358 million (€ 322 million) to build a battery plant near Budapest. Production start is scheduled for the second half of 2018; the capacity will be high enough to supply traction batteries for 50.000 electric vehicles per year.

Currently, Samsung SDI already supplies the batteries for BMW’s i3, made in South Korea. The production in Europe would help Samsung SDI to save logistics and cope with the demand from European customers. The report also hints to insider information that Samsung SDI competitor LG Chem plans to build a similar plant in Poland.

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