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We want to overtake Tesla, the Volkswagen concern expressed this wish a year ago, when it set itself the goal of becoming the world leader in the production of electric cars. In addition, it has the second largest car dealer in the world to lead the opening of the first own factory for battery cells in Europe.
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The first of a total of six gigabreweries will be located in Salzgitter, Saxony. From 2025, it should start supplying unified battery cells, the format and size of which will be uniform for all electric cars produced by the company and will be used by car manufacturers across the concern.
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Unified battery cell
- By 2030, 80 percent of cars manufactured by automakers across the Volkswagen Group will have battery systems with unified cells.
- For the remaining 20 percent of specialized models, which include, for example, trucks, the cells will be made by other suppliers.
- The article will have a uniform shape and size. However, it can have a different chemical composition depending on the type of electric car.
- The VW concern revealed the article while presenting plans for a new factory in Salzgitter, Germany.
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Among other things, VW promises to reduce its dependence on imports from Asia, where more than 90 percent of all batteries for electric cars were produced recently. “There are currently several dozen significant projects in preparation or under construction with a target capacity of more than one terawatt hour (1012 Wh) in 2030,” says Petr Knap, leading partner for the automotive sector at EY Czech Republic.
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The concern could thus avoid problems with sea transport and production outages in China, Japan and South Korea, which are the largest suppliers of battery cells to the old continent.
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“We see the efforts of European industry to bring some strategic components of our economy closer to us. The battery industry is a strategic part of the future automotive industry, at least in the area of production of final products these efforts will continue,” thinks Zdeněk Petzl, executive director of the Association of the Automotive Industry.
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However, if electric cars are to replace cars with internal combustion engines, as the European Union currently plans to do by 2035, it will also be necessary to secure enough raw materials for the production of batteries. The financial director of VW Arno Antlitz himself said in June that this could be the problem.
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“The most challenging topic is not increasing the number of car manufacturing plants. The most challenging topic will be the start-up of the battery supply chain,” said Antlitz.
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Europe will always be dependent on other regions when it comes to the import of materials for the production of cells, such as lithium, nickel, manganese or cobalt. “Unfortunately, our resources are limited. It is therefore essential that we do not bet everything on one card and try to spread the risk across continents, at least in terms of raw material sources,” says Petzl.
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In the case of the production plant in Salzgitter (and other factories that already have a certain location in Spain and Sweden), the supply of raw materials will not be taken care of by the concern itself, but by its external suppliers.
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Paradoxically, the production of a cell for storing electricity will also face the problem of energy. “For the current prevailing battery technology, we need to import not only most of the raw materials, but also a large amount of energy for the production of battery cells,” describes Knap.
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One dimension simplifies everything
The production of a single cell, which will be used by all of VW and possibly other companies in the future, is a way to simplify and streamline the production of electric cars. Car companies now take cells from different manufacturers who produce different types of batteries. VW now sources batteries from Chinese manufacturer CATL and Korean LG.
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This system now fundamentally complicates production for automakers. “In the case of more different designs, the demands on quality control increase, the complexity in planning and securing deliveries increases,” says Knap.
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Already during the development of a vehicle, which takes about five years on average, technicians must know what technologies and components they will use. The final product must then be produced relatively unchanged throughout its life cycle.
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“Because battery technology develops very intensively over time, it happens that individual models even within the same concern use different battery technologies, which then makes production unnecessarily complicated and therefore more expensive,” explains Petzl.
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Manufacturers must focus on the production of batteries due to European emission reduction targets. “However, for several years now, in the battery industry outside of the automotive industry, there has been really intensive research into new technologies – we can read about increasing the density of cells, their different composition according to the presence of heavy metals, batteries with a solid electrolyte, batteries using sulfur, graphite and other ‘cheaper’ batteries are being developed resources,” says Petzl.
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According to him, the battery industry and energy storage in general has enormous potential in the future not only for transport, but also for energy. “Currently, a number of strategic decisions are being made regarding the location of production of key technologies and components that will repaint the European automotive map for decades to come,” Petzl believes.
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However, the VW concern also promises another thing from the production of its own batteries, which could be key in increasing the sale of electric cars, namely reducing the price of the battery by up to half. “Thanks to the size of the concern – regardless of whether it is the VW group, Stellantis, Hyundai, GM or others – the unification of the cell will bring efficiency in the production of the batteries themselves and in logistics,” says Petzl.
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The battery drive is now one of the most expensive parts of an electric car. The battery makes up about 30 percent of its price. “Given the fact that batteries are the reason why the price of an electric car today is still roughly 1.5-2 times higher than a comparable conventional vehicle, these savings will primarily lead to cheaper products for end customers,” says Petzl.
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At the same time, he believes that car manufacturers can use part of the saved costs to invest in the further development of batteries, which will lead to their even better properties.
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However, inflation may slow down the discounting of electric cars. The prices of materials and energy are rising. “Therefore, we cannot expect a nominal drop in the prices of electric cars. Rather, one can realistically expect that they will increase in price more slowly than cars with internal combustion engines. In particular, the considered form of the new Euro 7 emission standard may increase the price of cars with a combustion engine by leaps and bounds from 2025-2027,” Knap thinks.
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