VW To Build Its First EV Battery Plant In China

It looks like China will be the first country chosen by VW to open one or more battery factories as part of their new long-term strategy.

This move means that the German company will invest billions to the new facilities in order to support their new plan of launching 30 fully electric vehicles by 2025.

The news broke when a source close to VW’s senior management spoke to AutoNews, citing the Chinese government’s push towards electric cars. VW expects to sell between two and three million fully electric vehicles and plug-in hybrids by 2025 with the company’s boss Matthias Mueller estimating that by 2030, a third of the Group’s entire production run will be electrified.

The ambitious “TOGETHER – Strategy 2025” represents a massive challenge for VW: “Whereas current global automotive cell capacity is estimated at around 27GWh of supply for the entire industry, VW believes it alone will need the equivalent of 150 GWh just to power its own fleet,” says the report.

The source continued saying that this roughly translates into 10 battery plants with each one of them requiring an investment of 2 billion euros ($2.2 billion in current exchange rates) which bring the total up to 20 billion euros.

How much of that investment will come from VW directly and how much will come from suppliers is still under discussion and when the source was asked about where all these new plants might be built he said “China is likely one of the first, since we think electromobility will catch on there as a trend much sooner given the government’s relentless push.”

The Chinese government wants more electric cars to deal with the smog and the pollution levels in city centers. Locally-made cars that can drive on electric power for at least 50km will fall into the ‘New Energy Vehicles’ category which are exempt from the current limits in several major cities and also benefit from various financial incentives.

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