The race to dominate the electric vehicle industry could be tighter as Volkswagen, the German car giant and rival Tesla, unveiled plans on Monday to reduce battery costs and operate a large-scale charging network.
In its first “Energy Day”, which commemorates the TSLA of the electric car manufacturer Tesla,
The long-hyped “Battery Day”, the German group that owns the Volkswagen, Audi and Porsche brands, has said it will rely on six giant factories in Europe to secure supplies, as the industry faces an imminent shortage.
Shares in Volkswagen Group VOW,
VWAGY,
VWAPY,
grew by about 3% months, while the company’s top executives outlined a roadmap for technological expansion.
Electric vehicles have become the company’s “core business” in Wolfsburg, Germany, said Herbert Diess, chairman of the group’s board of directors, and his new plans come as a battle to dominate the fast-growing space for electric vehicles.
Read also: Forget about Nio and XPeng. This company and Tesla will be the first two parts of electric vehicles by 2025, says UBS.
According to analysts at UBS, electric vehicles could reach 100% market penetration by 2040. In the next few years, the Swiss bank projects that Volkswagen and Tesla will emerge as market leaders, with the German company expected to arrive from followed by Tesla. in terms of the total volume of electric vehicles sold immediately next year.
Volkswagen removed Tesla from its top spot in the European electric vehicle market in 2020 and now has a market share of 20% to 25% in this key region. Europe is the second largest electric vehicle market in the world after China, hosting EV car manufacturers, including Nio NIO,
XPeng XPEV,
and WORLD 1211,
As car companies struggle in a sectoral pivot toward electric mobility, UBS said it expects the supply of battery cells needed to power demand will face “regional tightness this year and global shortfalls by 2025.”
To provide the batteries needed for the expansion, Volskwagen said it will rely on six gig factories by 2030. The first factories will be in the Swedish cities of Salzgitter and Skellefteå, where Volkswagen is building a factory with partner Northvolt.
Read more: Northvolt, backed by Volkswagen and Goldman Sachs, captures Cuberg in Silicon Valley as electric vehicle battery race heats up
Northvolt said Monday it had received a $ 14 billion order from Volkswagen for premium battery cells. The German group also increased its stake in the Swedish company, founded by a former Tesla employee with supporters, including Goldman Sachs GS,
and Spotify SPOT,
Executive Director Daniel Ek.
In addition, Volkswagen has said it will seek to reduce the cost of its batteries – the key factor in reducing the total cost of vehicles – by up to 50% over the next decade.
The savings in some form will be seen starting in 2023, Volkswagen said, when the group plans to launch a new unified battery cell that will be installed in 80 percent of electric vehicles by 2030.
“We aim to reduce the cost and complexity of the battery and, at the same time, increase its autonomy and performance,” said Thomas Schmall, a member of Volkswagen’s technology board and head of its technology map. “This will ultimately make electronic mobility accessible and technology the dominant driver.”
Addition: Buy these 3 battery stocks to play at the electric vehicle party, but stay away from this company, says UBS
To support the widespread adoption of electric vehicles by consumers, Volkswagen plans to expand its European vehicle charging network five times by 2025. Over the next few years, the company aims to operate 18,000 public fast charging points, including 8,000 in partnership with major oil company BP BP,
Volkswagen will build another 3,500 charging points in North America by the end of 2021 through its US subsidiary, Electrify America, as well as 17,000 charging points in China by 2025 through a joint venture.
Car analyst Matthias Schmidt told MarketWatch that “giant” manufacturers like Volkswagen are “slowly waking up and starting to show that size matters when it comes to an electric future [that] regulation forces them to enter ”.
More: Tesla is in decline, SUVs are king and more information on this key market for electric vehicles
European carmakers are being pushed to produce more electric vehicles by threatening fines of hundreds of millions of euros from the European Union over mandatory fleet emission targets.
The transition to electric mobility is also supported by demand, with many European governments offering thousands of dollars in tax exemptions and subsidies for consumers to choose electric vehicles.
“VW announces a high cost advantage by increasing production, deciding to integrate vertically to help reduce BEV costs through price parity, which is essential once the subsidy scaffold is slowly removed,” said Schmidt, who is also the European publisher Electric Car Report.