Musk to Volkswagen (VWAGY): You’re gonna need a bigger battery factory.
At least that seems to be what the German automaker thinks it’s going to take to challenge a company like Tesla (TSLA) for EV domination.
This week, Volkswagen executives say they believe they will need about 300-gigawatt hours (GWh) worth of battery cells a year by the end of the decade for their ambitious rollout of electric vehicles in Europe.
The supply chain update is part of the world’s second-largest carmaker’s strategy to raise the share of fully electric vehicles in Europe to more than 70% by 2030 at its core brand, details of which were unveiled last week.
After all, if the UBS’ prediction that Volkswagen and Tesla will sit at the top of an EV sector that will penetrate 100% of the automobile market by 2040, is true, that’s exactly what it’s going to take!
So far, Volkswagen, which sources batteries from LG Chem, Samsung SDI, SK Innovation and CATL, expects annual demand in Europe to be more than 150 GWh from 2025 and to be at a similar level in Asia.
Considering there are many more players in the EV game than just VW and Tesla, the million-dollar question is, how or where Volkswagen will get all these batteries if every other carmaker is doing the same thing?