VW: The World Will Need 40 More Gigafactories By 2025

4 weeks ago by Sebastian Blanco 18

VW Golf GTE Concept

Once again, Elon Musk is ahead of the curve. The CEO of Tesla said years ago that the world would need a lot of gigafactories. Hundreds, in fact. The way that Tesla uses the term gigafactory, it means a factory “with a planned annual battery production capacity of 35 gigawatt-hours (GWh)”, but it basically means a place where an automaker or other manufacturer can build massive amounts of batteries. It’s emblematic of Tesla’s electric vehicle lead that the term the company uses is being adopted by other automakers. In this case, it’s Volkswagen, which is saying that the world will need 40 new gigafactories in the next few years.

The problem, which regular readers will likely be able to guess, is that the coming onslaught of EVs will require more batteries than the world currently has the capacity to make. It is VW’s guess that the equivalent of 40 of Tesla’s Gigafactory 1 (the first Tesla location, in Nevada) by 2025. That’s not all that long from now, and as we know from the costs and issues in Nevada, there’s no time like the present to break ground.

The 40-gigafactory estimate comes from Ulrich Eichhorn, VW’s head of R&D, who said that the VW will need “more than 200 gigawatt-hours” of capacity. Technically, that’d only be six of Tesla’s 35-GWh plants, but if you figure that the rest of the auto industry will push to make as many plug-in vehicles as VW plans to, then that number shoots right up.

Good thing, then, that some companies are moving in that direction. Volkswagen has been speaking publicly about building a gigafactory in China and Tesla – surprise, surprise – said earlier this year that it would announce the locations of four more gigafactories by the end of 2017, including perhaps one in the U.S. Daimler just started work on a gigafactory-like plant as well.

Source: Automotive News

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18 responses to "VW: The World Will Need 40 More Gigafactories By 2025"

  1. Mil says:

    No s*** VW…almost everyone could see what Tesla was doing was what was needed and every other auto manufacturer with lofty aspirations of being fully EV by some future date was pathetic given they had zero plans for battery production.

    Good to see that VW is finally waking up to this though. Time for the other car companies to wake up too!

    1. Mister G says:

      EV market share is only 2.2% there is no way an ICE CEO is going to transition to EV in a substantial manner. We the people need to create demand today not tomorrow today if we want ICE manufacturers to transition to EV.

      1. Lou Grinzo says:

        Every ICE maker will transition to EV production, in time. The only question is which ones will be leaders and which will be dragged along, at great cost to them as they buy batteries from competitors.

        We are at the mother of all tipping points for this particular auto market disruption. Once there are enough BEVs on the market and enough consumers figure out how absurd ICE vehicles are for their personal use, then selling ICE cars will be what we used to call an “insurmountable opportunity” at IBM.

  2. M Hovis says:

    Nice short to-the-point article Sebastion. As stated in the opening paragraph, Musk put forth the math early when people questioned the size of his first gigafactory. VW is publically acknowledging the need. The real question I have is will VW and others step up and build their own gigafactories or will they farm it out? Nissan started making their own battery and then changed course a bit.

    It is early in the evolution of battery technology so it is understandable the fear of committing like Tesla has to bring manufacturing inside. I have read analyst speculating how Tesla’s gigafactory could be obsolete if the battery technology changes. I personally find it unlikely that a company that has challenged so much change is not capable of retooling.

    Exciting times ….

    1. pjwood1 says:

      I agree. Good article. Pointing out VW’s use of “Gigafactory” parlance, shows meaningful capitulation.

    2. Jason says:

      I think Nissan made a mistake of they have sold their battery business. They should have partnered with one of the larger players like Tesla has done. It should have been easier for them as well, they already had their battery division.
      Batteries will be the oil of the future, your can already see how LG Chem is befitting by EV investment.

  3. Someone out there says:

    Nice of them to acknowledge it at least. Now lets hope it leads to action on VW’s part.

    Not only do we need more gigafactories, these factories need to produce the next gen solid state batteries. Today’s batteries are tolerable but for truly massive scale they need to be better, lighter, higher density, higher charge rate and of course cheaper.

  4. Mister G says:

    The only way to make VW transition from ICE to EV is with a lawsuit.

  5. Jm says:

    To replace estimated 1.5 billion automobiles by 2025 with 60kwh battery cars could need as many as 320 gigafactories.

    But for EU, China, India 18/20/30Kwh battery cars with thermal management could work.

    1. AlphaEdge says:

      Every car is not going to be replaced by 2025.

  6. salkin says:

    Just do one Terrafactorie

  7. Pushmi-Pullyu says:

    Good to see that one legacy auto maker, at least, is facing up to the reality that they are going to have to build out battery cell manufacturing capacity far faster than they can get by just waiting around for current battery suppliers to react to demand.

    This isn’t the first time I’ve read of a VW spokesman saying something on the subject, either. Looks like Volkswagen won’t be one of the legacy auto makers left behind and then failing as the EV revolution advances!

    Not everybody is going to leave themselves limited to just a slice of the supply provided by LG Chem or Samsung. Yeah, I’m looking at you, GM!

    1. theflew says:

      I really don’t see large automakers getting in the battery cell business. There is almost no benefit. It’s a commodity business that the only way you’ll profit is volume and even then because of price pressures on the end product will guarantee there is little to no profit at the cell level. I’m sure if GM signs a multi billion dollar contract – LG will build all the capacity the contract calls for.

      1. Jason says:

        It is interesting. I think it could be like the pharmaceutical business. You develop some formula and patent it, then you have exclusive use for a number of years. Just imagine if Tesla/Panasonic crack a new formula that makes their battery 1/4 the weight and size with the same energy density, that would put them all ahead. Or if Nissan has created a formula that doesn’t need TMS and still performs at high or low temperatures? These will be the differentiators in the market. If everyone has the LG Chem battery then basically everyone is going to need a design that can fit that battery. It will be interesting to see how LG Chem markets a new formula, will they make it equally available to all their customers or will the cherry pick?
        It is a risky business, but every business is.

    2. Jason says:

      Except at this stage it is all talk. Let us know when they actually do something, anything, except talk.

  8. mn says:

    To make a sodium glass battery all you need is to coat a foil with sodium, coat a paper substrate with liquid glass and wrap both these on a sodium rich cathode yes the Goodenough/Braga battery, it would be 3 times powerful say the 2170 cell would hold atleast 18000ma, and the 18650 cell would hold around 9000ma. Huge huge benefits specially for power storage, Gigafactory output would jump to 100GW per annum and above all for Europe which is fighting with pollution and domestic unrest in regards to migrants flooding their countries, you know where they will end up as well. Hopefully Germany or investors in USA and China pick up the development of this Sodium glass technology and save lives.

    http://www.triplepundit.com/2017/03/glass-battery-longer-ev-range/

    1. AlphaEdge says:

      What is energy density? Charge rate? Cycle life? etc.

      Big claims, low on details, means you probably will never hear about it again.

  9. Kirk says:

    They actually miscalculated. They assumed 35 GWh/yr. GF1 is targeting 105 GWh/yr of cells and 150 GWh/yr in packs by 2020.

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