Electrical Equipment / Components & Telecoms

Volkswagen is considering promoting its newly established battery unit to conduct an IPO.

Thomas Schmall, a member of the Volkswagen Group’s technical management committee and chief executive officer of the Volkswagen Group’s parts division, said that this move involves not only a single-seat plant, but the entire battery business of the Volkswagen Group.

We do not rule out any possibility for the time being-at least for the battery business. "Schmal said, "Only a battery cell factory, it is impossible to be listed on the stock exchange, the whole thing must be combined with higher-level planning. "

Schmal said that Volkswagen is planning to establish an external technology partnership to reduce the cost of battery factories, and is also looking for external funding providers.

But Schmal also pointed out that Volkswagen clearly does not want to shun Wolfsburg's power too much. "The whole plan is so ambitious and vital to our future viability. You have to consider very carefully how to achieve the set goals economically." He said.

As the group announced on the Power Day held in March, Volkswagen plans to build six super battery production plants with its European partners by 2030, at a cost of tens of billions of euros.

According to Schmal, this is enough to provide batteries for more than 5 million electric vehicles. For factories in China, the United States and Mexico, if Volkswagen needs to rely on the standard battery supply there, it may also add more battery factories there.

But in Europe, the group may have higher demand for power batteries-such as the commercial vehicle division Traton Group. According to reports, even for long-distance trucks, the group prefers to use power batteries instead of fuel cells.

"We will have six super battery factories that can meet the demand for passenger car production so far," Schmal said. He said that the truck business unit will also develop products based on similar technologies. But Schmal also said that "there are many parallel technological paths in battery chemistry" and they are not contradictory to each other.

Volkswagen is also preparing to enter the business area of raw materials required for battery production.

"We must also move in this direction-we are studying the entire process chain from mines to battery recycling. We must actively enter the raw material business," Schmal said.

The group is currently preparing for larger-scale recycling at a pilot plant in Salzgitter.

Volkswagen Group and its US partner QuantumScape have high hopes for the development of solid-state batteries.

"We expect to see pilot plants that can carry out the first batch of mass production in 2025 or 2026," Schmal said.

However, in addition to self-produced (including co-manufacturing with partners such as QuantumScape and Northvolt) power batteries, Volkswagen also hopes to continue to purchase some batteries from external suppliers.

In other words, companies that supply batteries for mass-produced models may lose part of their orders because of Volkswagen’s self-built battery factories, but in the long run, they may not completely lose the opportunity.

"We must find a'cooperation model' with these large battery manufacturers, so that we have enough room for maneuver. We want to produce batteries by ourselves, but at the same time we also want to source from outside," Schmal said. "If we master the production process ourselves, we can become an indispensable part of the upstream raw material chain, thereby reducing our dependence on large battery suppliers. This is the basic philosophy that guides us."

Of course, Schmal also sees that as a battery manufacturer, Volkswagen still has huge room for improvement with today’s leaders in the battery manufacturing industry such as LG Chem, Panasonic, CATL, and SK Innovation.

"The battery market has become so huge, which has also created additional room for development for automakers such as Volkswagen." Schmal said.

He also believes that Volkswagen has sufficient capacity to negotiate with battery manufacturers. "In this regard, the size of the Volkswagen Group is helpful to us. With our 12 brands and 10 million new cars every year, we can build a stronger corporate image." Schmal added.