Vehicle OEM Volkswagen has created a joint venture and will finance battery production by purchasing up to €50 million (US$56million) worth of cells, the German firm has told news agency Reuters.
VW will buy the lithium-ion batteries from established cell makers LG Chem, Samsung, SK Innovation and CATL, Stefan Sommer, board member for components and procurement, told Reuters.
It will also buy cells from Swedish gigafactory start-up Northvolt, the company it created a joint venture with to build a manufacturing facility in Germany.
Volkswagen aims to secure 150GWh of battery production in Europe by 2025, and another 150GWh in Asia, before doubling capacity by 2030.
Volkswagen has established links with a number of cell manufacturers, instead of an exclusive agreement such as Tesla’s with Panasonic, ‘to avoid dependence from a monopolistic supply structure’, Dr Günther Scherelis (pictured), communications environment and sustainability at VW, told BEST Battery Briefing.
He added that the vehicle maker was moving to an 8:1:1 battery cell composition of nickel, manganese and cobalt by 2021— rather than a 6:2:2 structure— because nickel was more abundant as a mineral than cobalt and it was less of a conflict mineral.
SK Innovation will begin production of NMC 811 cells in Q3 of this year, with the additional above manufacturers all exploring the cell architecture.
For the Chinese market, Volkswagen sees potential in using lithium iron based (LFP) batteries due to their lower energy density than NMC cells. This is because the necessity for a long operating range is less important in China, Sommer told Reuters.