VW may take on Tesla with a €10bn EV battery plant
A report from Germany’s Handelsblatt news today suggests Volkswagen is preparing to build a multi-billion-euro factory to produce electric vehicle batteries, as part of its challenge to Tesla and to leave “Dieselgate” behind once and for all. The factory is expected to be similar to Tesla’s “Gigafactory” currently under construction in Nevada, and would play a key role in VW’s recently announced plans to sell one million electric or electrified vehicles by 2025. However, it should be noted that a VW executive described the Handelsblatt report as “speculation.” 
Tesla’s factory is expected to reach capacity by 2020, by which point it is hoped to be producing 500k auto batteries per year.

A spokesman for VW described the report as "speculation".

But there is no doubting VW's drive to corner a major share of the electric market as it tries to restore its image after the diesel emissions sandal, which will cost the company billions in recalls, fines and litigation fees.

Earlier this year, Mr Müller vowed to "make electric cars one of VW's new hallmarks".

If it goes ahead with plans for a battery factory, VW will be following the lead of the US electric carmaker Tesla, which is currently building its own "Gigafactory" in Nevada.

A driver charges a Volkswagen e-Golf electric automobile at a charging station outside the Volkswagen AG (VW) factory in Wolfsburg, Germany, on Friday, May 20. Krisztian Bocsi

Together with Panasonic, Tesla is investing up to $US5 billion ($6.96 billion) in the facility. Once operational, Elon Musk, the Tesla chief executive, says it will produce more batteries a year than were made worldwide in 2013.

Advertisement

The rationale behind car makers building their own battery factories is to give them independence from the Asian manufacturers which currently dominate the market.

Batteries are one of the most expensive components of fully electric cars. Mr Musk has predicted the Gigafactory could reduce the company's battery costs by 30 per cent.

Improvements in battery technology are vital to the success of electric cars. It is battery life that determines the vehicles' range, and reductions in charging time are expected to have a major impact on sales in coming years.

VW is yet to decide whether its battery factory will be located in Germany, Eastern Europe or Asia, according to the Handelsblatt report.

For the company to meet its target of generating one million electric car sales by 2025 it will need to invest heavily.

Despite announcing plans to be a market leader in the sector by 2018 three years ago, last year the group sold just 67,000 electric vehicles — the majority of them hybrids.

Advertisement

FAQ | Volkswagen emissions scandal

What has VW done?

The company has falsified emissions data on its diesel vehicles, pretending they were cleaner than they are

How exactly?

By installing a piece of software into computers on its cars that recognise when the car is being tested – a so-called "defeat device". This fine-tunes the engine's performance to limit nitrogen oxide emissions. When used on the road, the emissions levels shoot back up

How widespread is the problem?

Advertisement

11m cars worldwide had the software installed; 1.2m of them were in the UK.

Which models are involved?

The allegations, which have been admitted by VW, cover the Jetta, Beetle, Audi A3 and Golf models from 2009 to 2015 and the Passat in 2014 and 2015. Audi, Seat and Skoda cars are also affected, as well as VW vans. Some diesel and petrol vehicles also have "irregularities" around carbon dioxide emissions.

What happens next?

VW has offered to fix affected models and expects to start the recall in January 2016. It is facing investigations in over a dozen countries as well as lawsuits from motorists.

The Telegraph London