VW Plans JVs, Funding to Expand EV Supply Base

Volkswagen AG tells Reuters it intends to launch supplier joint ventures and help fund batterymaking capacity to support its aggressive electric-car sales plans.

Purchasing chief Stefan Sommer tells the news service the push is necessary because some EV-related suppliers remain skeptical about future demand for electrified powertrains.

To help convince them, VW has said it will buy €50 billion ($56 billion) worth of battery cells. This company estimates that by 2025 it will need 300 gigawatt-hours worth of battery capacity—split between China and Europe—to handle its initial flood of electrified models. That figure will double by 2030, according to Sommer.

He says VW is providing certain suppliers with financing for tooling. The carmaker also will help shoulder the risk of capacity expansion by setting up new supply facilities as joint ventures. Sommer tells Reuters VW Group production of electrified vehicles already is being hampered by a shortage of battery cells.

Reuters says the VW brand appears to have sufficient supplies of battery cells lined up. But media reports suggest the group’s Audi unit has been scrambling to find enough cells to support its EV production goals.