Volkswagen makes two big tech moves

Autonomous driving and electric cars are the two boom tech sectors of the near future and Volkswagen has made huge moves in each of them this week.

Firstly, it sacked its autonomous vehicle partner, US start-up Aurora, and then it bought into its Swedish battery-development partner Northvolt to deliver a new lithium-ion battery plant near Volkswagen’s Wolfsburg headquarters.

After being hand-braked by Samsung last month (when the South Koreans told Volkswagen they could only supply five gigaWatt-hours of lithium-ion batteries rather than the 20gWh they promised as their end of a record €50 billion contract), the German company changed tack.

It bought 20 per cent of Northvolt (with BMW chiming in as another major investor) to guarantee it 16gWh from a new cell factory in Sweden, then the same again from a new joint-venture plant in Salzgitter, Germany, which will come on stream early in 2024.

Volkswagen’s heavily publicised EV push will eventually demand 300gWh of lithium-ion battery cells, and Volkswagen has signed a record €50 billion in battery supply contracts to keep up.

Northvolt has presold a big chunk of its planned cell production already, with orders valued at $US13 billion through to 2030 in hand, while Volkswagen also scores a Northvolt board seat from the deal.

"With Northvolt, we have now found a European partner whose know-how and sustainable, CO2-optimized battery cell production processes will enable us to advance cell production here in Germany," Volkswagen procurement boss, Stefan Sommer, said.

And Volkswagen will need all the battery cells it can get, with more than 60 electric and electrified models set to launch between now and 2025, starting with next year’s ID.3 and the high-profile Porsche Taycan on the way.

It hedged its battery supply with China’s CATL (Contemporary Amperex Technology Company), SK Innovation and LG Chem, but relied on Samsung to supply its European-market needs.

But the major autonomous driving story this month is that Volkswagen has dumped Aurora and is moving closer to a strategic partnership with Ford.

Aurora, brainchild of ex-Tesla autonomy director Sterling Anderson, raised $US500 million in February from Volkswagen and Amazon, among others, after Volkswagen tried to buy the company outright.

Then it announced this week that it would supply a self-driving software platform for Fiat Chrysler for commercial vehicles, and that was enough for Volkswagen.

"The activities under our partnership have been concluded," a Volkswagen statement declared just a day later.

It might be more complicated than that, though, because Aurora already had signed contracts with Byton and Hyundai as well.

Ford and Volkswagen already have a commercial vehicle platform sharing deal in place and have had talks to expand that into EV and autonomous vehicles.

The rumoured plan is that Volkswagen will invest in Ford’s Argo AI subsidy, which is now valued at around $US4 billion after Ford tipped in $US1 billion in 2017.

It wouldn’t be an industry first, either, with Honda last year investing in GM’s autonomous-driving subsidiary, Cruise.

Last week Volkswagen said it would open 36,000 EV charging points in Europe by 2025.