Volkswagen Group (VW) has today committed to building 240GWh of lithium ion battery capacity for its electric vehicles (EVs) by 2030 from at least 6 battery megafactories or gigafactories across Europe.
If VW meets its target and achieves 100% capacity utilisation, this 240GWh target is 12% more than the 215 GWh of global lithium ion demand in 2020 according to data from Benchmark’s Lithium ion Battery Database.
The move was described by Benchmark Mineral Intelligence’s Managing Director, Simon Moores, as the start of an automotive OEM shift to bring EV battery capacity in-house as competition for new supply heats up.
“Captive battery capacity is now king in the world of electric vehicles,” Moores said.
The move will see VW aim to build six 40GWh battery cell plants or Gigafactories within Europe of which two have already been established with its partner, Northvolt, in Sweden and Germany.
It will give the world’s second largest car maker, behind Japan’s Toyota in 2020 output, captive European capacity of 4m to 4.5m EVs, Benchmark estimates.
These numbers vary depending on the average pack size VW is planning to use, which can vary quite significantly over the coming years.
VW is the second automaker to announce significant captive battery capacity plans following Tesla’s Battery Day which saw it announce an astonishing 3,000GWh or 3TWh of battery cell capacity by 2030, a plan which meets in stark contracts with supply chain reality at present.
‘The Hoover Dam through a garden hosepipe’
Benchmark has consistently warned that building the battery supply chain from mine to battery cell will always be the limiting factor for EV production and adoption.
With sustained and growing EV demand, the focus is turning to how quickly the world can scale the raw materials and chemicals that feed these battery plants.
For example, VW’s 240GWh announced capacity in Europe by 2030 would require 100% of global lithium production in 2016 and over 60% of lithium produced in 2020. Mining pioneer Robert Friedland told Benchmark that building the supply chain for key raw materials such as lithium, nickel and cobalt was the equivalent of “putting the entire contents of the Hoover Dam through a garden hose”.
Benchmark’s Reactions to Volkswagen Power Day