Rising popularity of electric vehicles (EV) has grabbed global attention. Poised to replace internal combustion engines, EVs are considered the new trend in the era of sustainability. A storm of competition ignited by Tesla, is brewing in the EV market, with traditional US and European automakers are pushing into in-house battery development and manufacturing with an aim to secure bigger cost advantages in the coming decades.
Europe-based Volkswagen Group, BMW Group and Porsche as well as US-based Ford Motor and GM all look to gain more control over their in-house battery production capacity and tap the benefits of independent R&D after having experienced the COVID-19's impact on the global chip supply chain. By controlling costs, capacity and technology, they are gearing up for EV market competitions in the coming decades while minimizing potential impact and uncertainties coming from relying solely on third parties for supplies.
Ford CEO Jim Farley pointed out that the company is committed to learn from the COVID-19 crisis. The company is taking this opportunity to revamp its supply chain to eliminate vulnerabilities down the road. This is especially relevant not only to semiconductors, but also battery cells.
Currently leading in in-house developed and manufactured EV batteries among US and European automakers, Volkswagen held the Power Day event, which shared a similar concept to Tesla's Battery Day, in mid-March for the first time. At the event, the company unveiled its new in-house developed batteries with detailed specs as well as the roadmap for expanding its capacity for the batteries. The Germany-based automaker plans to build six EV battery factories in Europe over the next 10 years either independently or via partnerships. The six factories will together generate a total capacity of 240GWh.
Volkswagen aims to gradually reduce battery production costs by 30-50% in a bid to help the company mass produce EVs at lower costs. This will allow Volkswagen to gain a ground to compete against Tesla, which is expected to set its EVs at prices of US$25,000 and lower.
Volkswagen is also adding battery production lines at its existing factories. At full capacity, its Braunschweig, Germany plant will be able to assemble up to 500,000 EV batteries a year for models based on Volkswagen's modular electric drive (MEB) architecture and 100,000 EV batteries a year for non-MEB-based models. That is a total annual battery output of 600,000 systems.
Volkswagen's subsidiary Porsche will soon start to purchase battery modules from Volkswagen and has a plan to build a battery plant in Germany as well. Porsche CEO Oliver Blume noted battery cells are a core technology for the German car industry, and Porsche wants to play a pioneering role in this.
Ford and BMW, on the other hand, are accelerating their own development of solid-state batteries. BMW promises a prototype EV powered by solid-state batteries by 2025. Ford announced in late April its new research and development center – Ford Ion Park – with a goal to improve battery technologies, test-optimized battery manufacturing techniques and vertical-integrated battery into future EV production. Ford is poised to produce its own battery cells by 2025 to power a new generation of longer-range and lower-costing EVs.
BMW and Ford both invested in Solid Power, a Colorado-based startup that focuses mainly on producing solid-state batteries, for its US$130 million Series B investment round in late April. The investment is giving Solid Power a push in producing full-scale automotive batteries, increasing associated material output and expanding in-house production capacities. Volkswagen also has a stake in Bill Gates-backed automotive battery startup Quantumscape with a goal to drive forward the joint development of solid-state battery technology.
BMW and Ford aim to utilize Solid Power's low-cost, high-energy all solid-state battery technology in forthcoming EVs. Solid Power plans to ship 100Ah cells to BMW and Ford for automotive qualification testing by 2022. Its production lines are now churning out 20Ah all solid-state batteries.
GM unveiled its proprietary Ultium battery technology jointly developed with LG Chem in 2020, which is set to drive battery cell costs below US$100/kWh. GM also announced in late April its US$1 billion investment to build new battery production lines at its Ramos Arizpe plant in Mexico, which are scheduled to be up and running in the second half of 2021. The batteries will power EVs that GM will start producing at the same factory complex by 2023.
