Volkswagen Needs To Take Caution In Satisfying 150 GWh Worth Battery Requirements For 2025

JUL 1 2016 BY MARK KANE 12

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

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12 Comments on "Volkswagen Needs To Take Caution In Satisfying 150 GWh Worth Battery Requirements For 2025"

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The “Regulator on VW” dynamic is one they know to keep alive. It is what they’ll point to, when it is time to say “dieselgate settlement costs have hampered our previous plans to reach 125GWh”. Lucy needs to keep it fresh, before pulling the ball away.

I think this is the only way out for VW. But do they really realize that?

Second: 150gWh with 3m cars per year is only 50kWh per car. Which is not enough. Even at 75kWh at 2m cars average is too low for 2025 market.

That could be enough. Remember that it will be a mix of pure EVs and PHEVs.

Yes. Cars in 2025 will need to travel 10,000 miles on a single charge, fly, and have the ability to go underwater as well.

Come on, dude. 50 KWH will be adequate for most car buyers today. Cars in 10 years will likely be a little bit more efficient, which would mean that those 50KWH will be an even more reasonable number.

Electric motors are already very efficient right now so there is not much to be gained there. 50 KWh may be a start point for 2018 but in 2026 we will likely be well above double that.
The Model S is already at 90 KWh and with 8% improvement per year you are at 215 KWh after only ten years. So there is little chance that cars will remain bellow 100 KWh by then.

The model S also weighs 4000 pounds. The battery pack weighs over half a ton. While electric motors are very efficient, hauling around all that extra weight reduces overall efficiency. If the batteries can be made later everything else in the vehicle can correspondingly be made lighter as well. There are serious efficiency gains to be made here.50kWh would probably be enough if they got the weight down.

Reducing weight can help but unfortunately going far also means at higher speed where 75% of the power consumption comes from aero not weight. Since the Model 3 will already have a Cd of 0.21 there is not much to improve on that, so the only way to increase range remaining is more KWh.

Germany needs to do something about their electricity rates. They are extremely high . . . for two reasons:
1) They subsidize low electricity rates for German industry by charging really high rates for residences. Mercantilist strategy.
2) Germany has a big debt load to pay for all the expensive solar PV and wind that they bought in the previous decades at really high prices. (Both solar PV and wind are MUCH cheaper now).

The high electricity rates likely dissuade people from getting an EV. So they need to create some specialized “EV rates” or something. Perhaps really cheap electricity from 11pm to 5am? Perhaps separate meters for EV chargers that get charged a lower rate.

Germany should dollar cost average into a lower strat of their PV and wind investments by buying more PV and wind at today’s lower prices.

If you think that electricity is expensive in Germany you should check their gas and diesel prices.

The EEG money needed will decrease with every year coming, starting fast as the oldest PV subsidies where the highest. Meaning our electricity should be cheaper by 2-3 ct in 2020. And 6 ct cheaper in 2030-2035. yay 🙂

Maybe VW Group could save time on rebuilding their brand, by partnering with Tesla Motors and Tesla Energy/(Solar City?), to access some Gigafactory capacity, help Tesla build GF2 in Germany, and partner with them on Supercharger use/expansion?! That might only cost them 5-6 Billion $. Maybe, they could negotiate away some of those fines cost, if they brought such an alternative to the courts? Personally, I think a real slap on their face would be to pay the big fines the USA wants, and see that money be used to help their competition accelerate EV Development, Expand Competition in EV Charging Infrastructure, and Solar Power Energy Storage, in the USA! VW should pay some hefty fines, for sure, and if they want to gain any benefit from those fines for their own shift to BEV’s and PHEV’s, they should have an independent, court approved supervisory board to keep their eye on them! It should be someting like 1 part Elon Musk, to push them forward at ludicrous speed;1 Part Nissan, to make sure all their related companies get the EV bug; 1 part EPA Monitoring to make sure they don’t cheat again; and 1 part Toyota, to make sure their… Read more »