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Published on June 1st, 2016 | by James Ayre


Volkswagen Considering $11 Billion Battery Factory In Germany

June 1st, 2016 by  

Originally published on EV Obsession.

The Volkswagen brand has become the face of auto-industry corruption, arrogance, and entrenched interest. The only motivating factor for the higher-ups at the company in recent years seems to have been profits — with no sense of responsibility for the truth, for public health, or for the wider environment apparently being present at all.

With that in mind, the company has been on something of a PR blitz recently, trying to salvage the brand name if possible. The latest news on that front is that the company is now considering investing $11 billion into the development of a dedicated battery factory in Salzgitter — which would presumably support the production of the company’s previously hinted at future electric vehicle (EV) offerings.

Volkswagen logo

The prominent German business newspaper Handelsblatt has reported that the Volkswagen board is slated to vote on the proposal on June 22.

Gas 2 provides more:

The newspaper says VW wants to be independent of the world’s principal battery makers — Panasonic, LG Chem, and Samsung. It offered no details on what battery chemistry Volkswagen will use to produce its batteries.

Volkswagen’s new head, Matthias Müller, says he and his team are working on a new strategy to dig the company out from under the diesel emissions cheating mess that has left it humiliated and demoralized. The plan calls for producing 1 million electric and plug-in hybrid cars annually by the year 2025. That is 5 years after Elon Musk says Tesla Motors will accomplish the same feat. The Volkswagen strategy relies heavily on the new MEB modular chassis it has developed for the BUDD-e electric car unveiled at CES in January. The new platform will support both all-electric and plug-in hybrid powertrains, allowing Volkswagen to adjust rapidly to changing customer expectations.

All of that said, the company still has quite a lot of legal issues to deal with. Governments in the US and Korea are still actively considering pressing criminal charges, and there are many tens of billions in damages likely to be claimed by various parties around the world as well.

The future of the brand is still, to my eyes, an open question at this point — it’s not as simple as purging the leadership, embracing EVs, and saying that everyone else who stood to benefit from the company’s previous actions is blameless….

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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

  • Jtaza

    Does anybody who is actually making the 48v lith battery that is in the new AUDI CUV?

  • Kraylin

    As one commenter already mentioned in a less than ideal way, a lot of people here seem to lean towards extreme opinions. We are not going to transition to EV’s overnight or anytime soon and VW sure as heck isn’t going to go bankrupt over their recent challenges. In fact, they have just taken the #1 manufacturer spot from Toyota for Q1 this year.


    I want the EV transition to happen as well but a dose of reality is healthy! Major manufacturer’s are nowhere near danger and have literally years to transition to developing EV’s if that’s what the market demands.

    • Floridared

      VW profits down 86% for Q1, sales sliding for 7th consecutive month in US. Right now the company is in freefall. The settlement with US regulators could be anywhere from $10-20 billion. BP type figures. And then there is possibility of criminal prosecutions.

      I suspect these “major manufacturers” are now where Nokia, Blackberry, Motorola and Ericksson were exactly 10 years ago. Right before the iPhone came out.

      The biggest, like VW, can rely on their governments to bail them out; they will survive. Other brands will merge. The rest will disappear.

      • Ulenspiegel

        The USA are only a small market for VW, therefore US sales numbers are not relevant for to be or not to be.

        10-20 billion EUR will not kill VW, no need for governmental support. BTW it is the federal state of Lower Saxony (Niedersachsen) which owns part of VW and at the moment we have no discussion in Germany about a potential bail out for the VW group, which could of course sell one of their companies if the fine is > 30 billion.

        • Craig Hutcheson

          Would VW perhaps be interested in a technology that could make all of their emission problems go away overnight?
          Answer: Probably not!

      • Kraylin

        You are ignoring the fact that VW is still number 1. Although their sales are sliding it appears it is more market driven then “dieselgate”. Many other manufacturer’s are down as well, more so then VW even. Even if Tesla reaches its goal of 1mil/year for 2020 (it won’t) it is only 10% of VW production. The major manufacturer’s have tons of time to adapt and the market still has not proven people even care about EV’s. Most people I talk about still have no knowledge or desire for an EV, and I talk to a lot of people.

  • JJ

    The Clean Technica brand has become the face of media sanctimony, arrogance, and supercilious hyperbole. The only motivating factor for the higher-ups (or lower-downs) at the company in recent years seems to have been their ego (or dogma) — with no sense of responsibility for the truth, for serious investigation, or for the wider reality apparently being present at all.

    Your first sentence makes me want to go out and buy a Volkswagen.

    • Djoni

      That much?

      How does your commentary stand in the face of all the spill they knowingly have done.

      Truth hurt sometimes, I know.

      But if you want an hyperbole, here’s a better one, CLEAN DIESEL.

      I don’t know any other this big.

      Maybe a breathable cigarette?

      • JJ

        I refer you to my reply to Brooks Bridges.

    • vensonata .

      So the scandal never happened? The court cases against VW are all fiction? Or what? Or you are just loyal to VW no matter what?

      • JJ

        I refer you to my reply to Brooks Bridges

    • Bob_Wallace


      • Jenny Sommer

        My pro nuclear account?

    • John Moore

      JJ, I think that you should go out and buy a Volkswagen. A nice diesel.

    • Brooks Bridges

      And the lying to and cheating of millions of VW diesel buyers by VW? That doesn’t bother you just a little more? You have a strange view of character.

      • JJ

        You’re the lucky winner who’s getting a response. But the reply applies to all.

        What bugs me about the article’s opening paragraph is the absolutist hyperbole. It’s symptomatic of a certain style of reporting. e.g. “ONLY motivating factor … NO sense … AT ALL” on top of the usual list of adjectives thrown at large corporations in a sweeping dismissal of everything they do. It would be too tedious for me to go into details, as it would have been for the author here. But the answer is not to just make the biggest generalisation when there’s no room for caveats.

        But I don’t wholely blame the author. Readers must take some blame for their enthusiasm for such hyperbole. You think VW’s cheating “doesn’t bother me just a little”? You do realise my posting was a parody? (And it wasn’t just VW buyers that were cheated. The emissions regulations benefit us all – I live in a big city and am itching for dominance of electric vehicles).

        I would say something here about the standard of public discourse, but I’m aware I’m on a rant. But my excuse is that I’m not the article writer – I’m someone on a comment thread, probably in my underwear.

        • Brooks Bridges

          What part of the first paragraph was not factual? Please show us by restating it as you think it should have been written.

          • JJ

            Volkswagen. The people’s car. Then the car of the Nazis. Then after the war, part of the industrial renaissance that rebuilt Germany and rebuilt the German pride. Now the Nazis are after the car maker again. But not in a good way.

            Volkswagen have undone themselves with an act of self sabotage and mindless crookery, like a privileged and otherwise wealthy aristocrat caught with his hand in the till to pay for his coke and $2000 per night hooker habits. But Volkswagen is not one person. It is many, many thousands. How must those dedicated and proud workers feel? And the high-ups who’d enthusiastically advocated risking VW’s most precious gem, the Golf (is it still called the Rabbit in the land of the grotesques such as muscle cars, SUVs and, oh lordy, pickup trucks?) by putting a battery in it – ignorant of their right-hand’s dastardly deeds, whilst their left waved a flag of fraternité and weaved the warp and weft of a better cloth.

            VW were already EVing their way to the glorious uplands of our electric (adj) electric (noun) future. And do we think their financial overlords were thanking them for selling a piffling few E-Golfs and E-Ups? The State of Lower Saxony has a financial responsibility to their constituents, not a mandate to make them martys by betting the farm.

            The irony now is that the farm may well be being bet. VW not only faces, quite rightly, penalties and costs for its cynical, criminal stupidity, but also sits in the court of public opinion, a double jeopardy, autrefois convict. The myth has it that there are no atheists in foxholes. Not true. But this one prays that he never feels the heat of the mob.

            The way to automotive redemption is paved not with gold, but with the beautiful lustre of lithium…

            Ok, that didn’t strictly answer your challenge, but allowed me to make some points in an entertaining (to me at least) way.

          • Brooks Bridges

            No, you didn’t answer challenge at all. You’re a bit like a guy in an archery contest who contends he should win because the average of his shots is the center of the target even though none is anywhere near center.

          • JJ

            Someone’s just been induced to use a simile

          • Bob_Wallace

            How would you summarize your word dump?

            The one that did not address the question you were asked.

          • JJ

            “Beyond your comprehension”

          • Bob_Wallace

            I learned to recognize bullshit decades ago.

            I grew up on a farm.

            Now, best you respond to direct questions rather than post more bull. Not a lot of tolerance for jokers here….

          • JJ

            So, I’m being asked to have a go at re-writing that first sentence / paragraph (I should have said paragraph in my first posting). Firstly, let me be more clear about my criticism. Parody hasn’t worked. Neither has a florid skit invoking Nazis, martyrs, the State of Lower Saxony, drugs, hookers, an allusion to masturbation, and God. I think it was the implication of sanctimonious Nazism that has got folks’ goats. Oh lordy, there I go again.

            Ok. The opening sentence alluded to something important, but conflates it with the corruption and throws in arrogance for, erm, a punchy three-adjective phrase? (Yes, the culprits, not all of VW note, could have arrogantly been certain they would get away with it, but they could also have been calculating some kind of good chance of getting away with it, and some no-doubt will indeed get away with it in some sense). The important point alluded to is the fact that a regulated market economy, whilst good at harnessing self-interested motivation for the better good, struggles to induce an extremely costly investment such as that needed to switch from an oil economy to one that is carbon-free. “Entrenched interest”. Well put. But the same sentence implicates the whole industry, and the whole of Volkswagen, as being currupt and arrogant. As I’ve already said, but in terms that are too obscure, or too goat-getting, to be taken on, the irony is that the self-interest that can stop the likes of Volkswagen, or indeed the vast majority of companies or people, becoming a marty to a cause bigger than itself, is now inducing it to invest heavily in clean tech. I suspect that Vokswagen could make more money for their owners (or the proxy of the owners in the case of the State of Lower Saxony) by not (yet) making that investment, and let short memories and broader indiffernce restore its fortunes. And, as I’m sure we’re all aware, VW is more than VW (from Wikipedia – Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Škoda and more). But they are swinging the pendulum towards martydom. Good. For me. And for most of the rest of the world. Perhaps not so good for the percentage of innocent employees of Volkswagen and the good folk of that region with the gift of a comical name, The State of Lower Saxony.

            So, to capture that in a fair but punchy opening paragraph? Erm, maybe I’m not up to it. I’m a programmer, not a reporter, but here goes. (I’ve stubled upon some interesting quotes, and have opted for a lazy or perhaps hackneyed style).

            “It takes many good deeds to build a good reputation, and only one bad one to lose it” – Benjamin Franklin. “We’re crooks” – Volkswagen. To restore their reputation, and to honour the hard work of those in VW who have integrity, they need to perform many, many good deeds. Or perhaps one massive one. The self-interest of companies, and their stakeholders, is normally a block on the massive investments needed to make dramatic changes, such as the switch from an established oil economy to a carbon-free one. Volkswagen’s hand is now being forced by the court of public opinion, and is looking to accelerate its developments of electric vehicles. “You can’t build a reputation on what you’re going to do” – Henry Ford.

          • Bob_Wallace

            We’re going to grant you an honorary Ph.D.

            Pilled Higher and Deeper.

          • JJ

            My, you’re a thoughtful person

          • ROBwithaB

            The e-golf is a great vehicle, by all accounts. And it was on the road long before the diesel scandal broke.
            There was an old guard at VW. They were living in the previous century. Arrogant, old, grumpy and clinging to past glories and old tedhnology. They are now (mostly) gone. In this sense, the whole “dieselgate” thing was probably a blessing in disguise.

            A whole generation of young, smart and very environmentally- aware engineers are now rising up through the organisation.
            Don’t bet against VW.
            Reports of its demise are greatly exaggerated. People are still buying Porsches, Seats, Audis, Skodas, and the trucks.
            The VW brand was never that big, particularly in the US. It hasn’t been the main profit centre for some time.
            The shares are looking pretty cheap right now…

          • Calamity_Jean

            ” the Golf (is it still called the Rabbit in the land of the grotesques such as muscle cars, SUVs and, oh lordy, pickup trucks?)”

            No, they call it the Golf in the US now too. I should know, I own one.

        • ROBwithaB

          Some of the writing on CT cannot (and should not) be thought of as “journalism”.
          As Zach has mentioned in his defense, they operate on a limited budget, and that the site is more of a “blog” than a newspaper.
          Personally, I prefer my “news” to be more fact than opinion, but I’m probably in the minority.

          There’s been some ongoing debate around this. Some would prefer a “quality over quantity” approach. Apparently quantity and click-baity hyperbole are better at paying the bills.
          I have learned to simply skim (or even ignore) most of the bumf. I would recommend glancing at the byline before proceeding. It shouldn’t take too long to develop a sense for which authors to avoid…

          • Jenny Sommer

            I don’t mind the articles at all…but JJ should probably avoid Zach/Tesla or CT/VW combos and avoid the comments completely 🙂

            Personally I would love to see more predictions (in the forum). It would really be fun to do that.
            Maybe we could have prediction articles that CT would come back after some years to see if people where right….

    • Bob_Wallace

      First sentence – “The Volkswagen brand has become the face of auto-industry corruption, arrogance, and entrenched interest.”

      JJ – “Your first sentence makes me want to go out and buy a Volkswagen.”

      Is this a “They may be crooks, but they’re my crooks” statement?

  • Harry Johnson

    VW intends to run the entire factory on diesel because it is so superior.

  • Mike Shurtleff

    Talk is cheap.

    • JamesWimberley

      Handelsblatt is a reputable source and the proposal is up for a vote in three weeks. Management don’t table such proposals unless they are pretty sure of the votes. This is a lot more than PR spin. However, the “11 billion” price tag probably is. Nobody starts that big.

      • Ulenspiegel

        “However, the “11 billion” price tag probably is. Nobody starts that big.”

        Had the same thought. In the past VW claimed that a new generation of cars requires around 15 billion EUR investments (in all factories), 11 billion for one factory sounds much too high.

    • Alastair Leith

      Especially when they’re looking to buy reputational repair.

  • Jenny Sommer

    I suspect they will ramp up faster when demand shows. By the end of the year VW AG will have produced ~103.000 electrified cars in 2016. An 11B cell factory should be good for 1-3mil cars /a.
    The jobs in Lower Saxony would ve going away so they need that battery production.
    It’s inevitable and some VW executives have been talking about it a long time already.

  • omar

    they will sell car with one mile range but automatically set that it run a hiden ICE after 0.5mile and that engine will do the rest of the trip! another defeat

  • vensonata .

    11 Billion! That’s a lot of scratch! Bring it on, VW, bring it on.

  • nakedChimp

    wow.. 1 million PHEV and BEV lumped together by 2025.

    That is just BAU, not a change.


  • Matt

    So how much of this is a PR stunt for German people/government? Let me know when they break ground. If it does go forward, you know they will get a better deal than TESLA did. They have very tight ties with the German government. So get a move on and “show me the batteries!”

    • Philip W

      Yeah VW has been big with ‘plans’ the last year. Now they just need to realize them. All of them.

      • Rick Danger

        ANY of them.

  • JamesWimberley

    Volkswagen is a national champion.12% of the shares, and 20% of the voting rights, are held by the German state, in the form of the Land of Lower Saxony. It employs over 100,000 workers in Germany directly (out of 610,000 worldwide) and many more indirectly. There is zero chance that the German government will allow VW to die – it would be electoral suicide. The situation is not quite so clearcut in other countries with assembly plants, but most of their governments will surely reason the same way. The stakes in the lawsuits are scapegoats and billion-dollar fines, not the survival of the company.

    • Philip W

      Yes the government won’t let the carmakers die. Exactly like GM in the US.

      • Bob_Wallace

        Like GM. And Chrysler twice. And the government was standing by to rescue Ford which came close to failure.

        • Craig Hutcheson

          But Ford didn’t fail, do you ever wonder why?

          • Bob_Wallace

            No, I know why.

            Ford had somewhat better reserves than GM, but Ford came very close to needing federal government assistance.

            And had the federal government not come to Chrysler’s and GM’s assistance Ford would almost certainly have gone under. All three companies, along with foreign car companies manufacturing in the US obtain parts from the same suppliers. If Chrysler and GM had quit buying parts then many of the suppliers would have gone out of business, leaving Ford with no parts.
            And, do remember, car companies played no role in the financial bubble that brought on the Great Recession. It wasn’t GM’s fault, it wasn’t Ford’s fault. It was the fault of inadequate governmental regulation and supervision. Because, you know, freedum….

    • Ulenspiegel

      “The planned battery gigafactory woiuld be in Salzgitter – in Lower
      Saxony. Not the cheapest place for it, but the Land has 20% of the
      votes. CYA first.”

      From a logistical point of view Salzgitter has some advantages. Why building far away when you have nice opportunities in your backyard.

      What are the alternatives?

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