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Volkswagen pushes JV partners to build electric car battery plants

  • Published | 16 April 2019
VW is retooling 16 factories to build electric vehicles and plans to start producing 33 different electric cars under the Skoda, Audi, VW, and Seat brands by mid-2023 which will fuel the electric vehicle and infrastructure market.
Global: Volkswagen is pushing its joint venture partners including SK Innovation (SKI) to build electric car battery plants which have at least one Gigawatt manufacturing capacity. Volkswagen will buy 50 billion euros ($56.57 billion) worth of battery cells for electric cars and has identified South Korea's SKI, LG Chem and Samsung SDI as strategic battery cell suppliers as well as China's Contemporary Amperex Technology Co Ltd (CATL). Company is considering an investment in a battery manufacturer in order to reinforce its electrification offensive and build up the necessary know-how. SKI is building a battery cell manufacturing plant in the United States to supply Volkswagen's plant in Chattanooga, Tennessee. SKI will supply lithium-ion battery cells for an electric car that Volkswagen plans to start making in Chattanooga in 2022. LG Chem, Samsung, and SKI on will also supply battery cells for Volkswagen in Europe. CATL is the automaker's strategic partner for China and will supply batteries for its electric fleet from 2019. According to BlueWeave Consulting, Electric vehicles (EVs) are the inevitable future of the automotive industry. The rising public awareness of air quality and the burden of disease caused by air pollution is an essential step in reducing air pollution and improving public health which is accelerating market demand for electric vehicles. As the global temperatures are increasing at an alarming rate, governments and industry around the world have pledged to reduce greenhouse gas emissions. Declining crude oil reserves and issues concerning deprivation of the environment are the main factors fuelling the expansion of electric vehicle battery industry. The market for electric vehicles depends heavily upon the development of its primary component, i.e. the EV battery.  Owing to the high demand for electric vehicles, the market for EV batteries has developed significantly over the past decade, with manufacturers focusing research on introducing cost-effective solutions to be used in automobiles. However, incentives and subsidies on the utilization of such a vehicle is a new factor propelling expansion for electric power drive vehicles. In the current market scenario, policy support is among the major factors driving the electric vehicle battery market, as policies have been lowering the barriers for electric vehicles adaptation. Moreover, technological advancements in electric vehicles and infrastructure with proactive government initiatives are expected to unfold various opportunities for the growth of the electric vehicle and infrastructure market in the future. According to the recently published report by BlueWeave Consulting on “Global Electric Commercial Vehicles Market by Propulsion type (BEV, HEV, PHEV, FCEV), by Vehicle type (Bus, Truck, Van, Others), by Component (Motor, Battery, Others) – Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2014-2024,” the Global Electric Commercial Vehicles market is projected to grow at a CAGR over 13.0% during the forecast period in terms of value. The market is expected to reach over USD 1, 49,316 Mn by 2024, supported by government subsidies and tax rebates for commercial electric vehicles. Need for fuel-efficient and emission-free vehicles and the increasing demand for the electric commercial vehicle such as an electric truck in the logistics industry to minimize the additional liability of fuel expenses. Innovations in EV battery capacity, which will enable the electric commercial vehicle to carry heavy loads over a longer range, can create new revenue generation opportunities. According to the upcoming report by BlueWeave Consulting on “India Electric Commercial Vehicles Market by Propulsion type (BEV, HEV, PHEV, FCEV), by Vehicle type (Bus, Truck, Van, Others), by Component (Motor, Battery, Others) – Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2014-2024,” India Electric Vehicle is projected to grow over a forecast period. The demand for electric vehicles is governed by an increase in demand for fuel-efficient, high-performance, and low-emission vehicles. In addition, the trend of reduction in vehicular emission due to stringent rules & regulations in several states and the growth of public charging infrastructure in India are fuelling the market growth. According to the recently published report by BlueWeave Consulting on “Global Electric Vehicle Battery Market, by Battery Type (Lithium-ion Battery, Lead Acid Battery, Nickel Metal Hydride Battery, and Others), by Vehicle Technology (BEV, PHEV and HEV), by Vehicle Type (Passenger Car, Commercial Car and Two Wheeler), by Region (North America, Asia Pacific, Europe, Latin America, and Middle East & Africa); Size and Forecast, 2014-2025,” Global Electric Vehicle Battery market is expected to grow with a CAGR over 19% during the forecast period 2018-2025, owing to increasing demand for environment-friendly vehicles. Diseases caused by air and water pollution are epidemic among minorities. Environmental pollution causes more than three times of death than malaria, tuberculosis, and AIDs, countries such as India and China records the maximum death caused by environmental pollution. Pollution causes 7% of the medical expenses among middle-income group people across the world. According to World Bank air pollution cost in India was approximately 8% of its GDP or USD 560 billion in 2013.  Hence, raising public awareness of air quality and the burden of disease caused by air pollution is an essential step in reducing air pollution and improving public health which is accelerating market demand for the electric vehicles battery market. According to the recently published report by BlueWeave Consulting on “India Lithium-ion Battery Market, By Type (Lithium Cobalt Oxide, Lithium Manganese Oxide, Lithium Iron Phosphate and Others), By Components (Cathode, Anode, Electrolytic Solution, Others) By Application (Consumer Electronics, Industrial and Automotive), by Region; Size and Forecast, 2014-2025,” India Lithium-ion Battery market is expected to grow with a CAGR over 23% during the forecast period 2018-2025. Increasing pollution concerns, rising adoption of electric vehicles, increasing income-levels and surging demand for quality and uninterrupted power are some of the key factors driving the growth of Lithium-ion batteries market in India. The growing consumer electronics market is complimenting the growth of Lithium-ion batteries market in India owing to its light-weight, high energy, and power capacity features. Moreover, increasing awareness towards portable and stationary energy storage coupled with the government’s push towards solar and wind projects are expected to contribute to the growth of the lithium-ion battery market over the projected period.