Volkswagen BUDD-e

Volkswagen BUDD-e

Volkswagen issued a bold announcement that it will produce about 2-3 million electric cars annually by 2025.  This goal will be attained by the VW Group as a whole - including Audi, Porsche, Skoda, Seat, and more.

At the same time, the German company noted the anticipated requirement of 150 GWh of batteries (which is a few times more than the eventual output of the Tesla Gigafactory).

As with such a volume, Volkswagen looks to become not only a manufacturer of battery packs, but also the battery cells as well.

And here comes the risk, well described in Chris Bryant's article "Volkswagen's Risking an Electric White Elephant" at Bloomberg.

Volkswagen is thin on cash after DieselGate forced company to secure a 16.2 billion euros ($18.4 billion) provision for diesel-related fines and recall costs.

Even if VW find a spare ~10 billion euros for this huge battery undertaking, there is also a need for building the right battery technology, or at least on par with competitors (Panasonic, Tesla, LG Chem, Samsung SDI and others).

"Having blackened its reputation by cheating on emissions, VW need to avoid creating a white elephant with its efforts to make amends."

Perhaps one of the VW Group's first actions (and use of newly redirected resources) is to purchase/take control of a current major battery maker that already has a firm grasp on the technology of today, and where we are headed tomorrow.

White elephant - In modern usage, it is an object, scheme, business venture, facility, etc., considered without use or value. (Wiki).

source: Bloomberg