Volkswagen switches EV-sourcing strategy

Volkswagen’s ground-breaking €50 billion purchasing contract with Samsung could unravel as the Korean EV battery maker admitted it couldn’t meet the German carmaker’s supply targets.

Shares in the battery maker took a 4.9-percent hit when sources admitted it could not supply the agreed 20 gigaWatt hours of modular battery capacity – which would be enough to put 100 kiloWatt/hour battery packs in 200,000 cars a year – and could only commit to five gigaWatts.

The news comes as a hit to the Volkswagen Group’s plans to roll out more than 60 electrified cars by 2025, starting with its ID 3 early next year. The Group already has the Audi e-tron in production and will follow quickly with the Porsche Taycan and the Audi e-tron GT, plus five other confirmed Volkswagen-branded EVs.

Its budget brand, Skoda, even launched its own EV sub-brand today, in the iV nameplate, starting with the Up-based CitiGo and the Superb.

It’s not all doom and gloom for Volkswagen, which hedged its battery supply with China’s CATL (Contemporary Amperex Technology Company), SK Innovation and LG Chem, but it committed to Samsung to supply its European-market needs. SK Innovation has the contract to deliver its US needs from 2022.

Just weeks ago Volkswagen announced a joint-venture project to build a German battery-cell plant with Sweden’s Northvolt AB, which is planned to deliver 10 gigaWatt hours annually.

The eventual needs of Volkswagen’s EV push are estimated to be around 300 gigaWatt hours and it embarked two years ago on a strategy to diversify its supplier base, including designing in the ability to mix-and-match batteries inside the same battery packs.