Autonomous Vehicles

Published on June 18th, 2016 | by Zachary Shahan

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Volkswagen’s Tremendous Transformation To Electric Vehicles — Some Context & Commentary

June 18th, 2016 by  

Originally published on EV Obsession.

Volkswagen CEO

Context & commentary: As you well know, Volkswagen got its shoes knocked off last year when researchers in West Virginia discovered that Volkswagen had been massively cheating diesel emissions tests. The company has repeatedly indicated that it would shift its focus to electric vehicles in the wake of the scandal, but it’s been hard to gauge how seriously Volkswagen aims to do so. However, for anyone in leadership connecting the dots, the diesel scandal actually provides the company with the perfect opportunity to make a quick shift that other automakers are practically imprisoned from making.

As discussed here, here, here, and, most recently, here, conventional automakers are stuck between a huge rock and a very hard place. If they transition to electric vehicles very quickly, they lose expected revenue from massive investments in manufacturing facilities, IP, personnel, etc. (related to internal-combustion-engine cars). This would not make stockholders happy, and it would put a lot of the top staff out of business. However, if they don’t transition to electric vehicles quickly, and the market does (via companies like Tesla Motors, Faraday Future, Apple, Google, Atieva, etc.), they get absolutely wrecked and have to ask their governments to bail them out. Hmm, which path would you take?

The situation with Volkswagen, of course, is that it is expected to massively overhaul its focus in the wake of the diesel emissions scandal. You could say it is forced to make the EV switch sooner than others, or you could say such a move still takes a bit of foresight and courage. I’d like to be a fly on the wall in Volkswagen board meetings before making a call on this one. Either way, though, this is what Volkswagen seems intent on doing.

In the end, it may make Volkswagen the best-equipped company to lead the EV revolution … ironically.

As I’ve written many times before, two (of five) huge competitive advantages Tesla Motors has right now are basically just about making electric cars absolutely, without any doubt, better than gas cars — cheaper batteries and Supercharging for road trips. It recently slipped that Volkswagen is following Tesla’s lead and plans to build a $11 billion battery factory in Germany (a good way to save the jobs it will likely drop from a move away from gas/diesel cars), and the company has also announced in the past years that its future long-range electric vehicles will be able to utilize super-fast charging (150 kW and up), even though there’s still no public word or hint about a legitimate network of super-fast charging stations. Though, I wouldn’t put it past Volkswagen at this point. It seems Volkswagen may be the first major automaker to be fully transformed by Tesla’s Secret Master Plan.

Naturally, I’m not calling this a shoo-in. Volkswagen has as monumental a task going forward as Tesla has — even more so. It faces some big stockholder and reorganization challenges, but shareholders in automakers such as Daimler and BMW have been repeatedly asking their executives what their response to the Tesla Model 3 is, so let’s hope the investment community as a whole gets the picture soon that this is Volkswagen’s best move forward.

Oh yeah, and none of that is even addressing self-driving cars. But it seems clear this key evolution is an important part of Volkswagen’s transformation as well.

Volkswagen states that it aims to sell 2–3 million electric cars per year by 2025, but I’m guessing that’s actually a conservative estimate that it actually hopes to surpass — projections that far out are, of course, tough. (For reference, Volkswagen Group sold just over 10 million vehicles in 2015, and it puts 2–3 million in 2025 at 20–25% of its sales.)

Take a look at the full announcement from Volkswagen below and tell me if this doesn’t look über serious to you. And it’s a good sign that Volkswagen explicitly states that it aims to have 30 fully electric models on the market in the next 8.5 years.


 

Highlights of the news, from Volkswagen itself:

New Group strategy adopted: Volkswagen Group to become a world-leading provider of sustainable mobility

  • “TOGETHER – Strategy 2025” ushers in the biggest change process in the Company’s history, with the focus on transforming the core business and tapping potential new revenue streams
  • Major electrification initiative planned: more than 30 new e-vehicles by 2025, annual unit sales target of two to three million
  • Battery technology, digitalization and autonomous driving to be developed into new Group competencies
  • Components business to be realigned
  • New mobility solutions business to be quickly expanded
  • Projected investments in future technologies in the double-digit billion range, financed through Group-wide efficiency improvements and portfolio optimization
  • Operating return on sales of 7 to 8 percent and return on capital employed in the Automotive Division of more than 15 percent by 2025 targeted
  • Increasing profitability and efficiency of the Volkswagen brand are key to achieving Group targets
  • CEO Matthias Müller: “The Volkswagen Group will be more focused, efficient, innovative, customer-driven and sustainable – and systematically geared to generating profitable growth.”

Full press release from Volkswagen (minus a short video and the highlights above):

The Volkswagen Group is laying the foundations for lasting success in tomorrow’s world of mobility and its evolution into a world-leading provider of sustainable mobility. In order to achieve these goals, the Board of Management – with the approval of the Supervisory Board – has adopted a future program, “TOGETHER – Strategy 2025”. By doing so, it has also launched the biggest change process in the Volkswagen Group’s history. The new Group strategy comprises a raft of far-reaching strategic decisions and specific initiatives essentially aimed at safeguarding its long-term future and generating profitable growth. This is to be achieved by comprehensively transforming the core automotive business, rapidly establishing a new mobility solutions business, significantly increasing efficiency as well as strengthening innovation power and entrepreneurial mindset and approach in the Company.

“Volkswagen has always enriched the lives of millions of people all over the world with its brands and products. Our aspiration is to continue that success story and play a leading role in shaping auto-mobility for future generations, too. This will require us – following the serious setback as a result of the diesel issue – to learn from mistakes made, rectify shortcomings and establish a corporate culture that is open, value-driven and rooted in integrity,” explained CEO Matthias Müller during the presentation of the new strategic direction in Wolfsburg.

“Our future program ‘TOGETHER – Strategy 2025’ will make the Volkswagen Group more focused, efficient, innovative, customer-driven and sustainable – and systematically geared to generating profitable growth. We aim to create lasting value for all our stakeholders. This can only be achieved together – with our employees, with and for our customers, shareholders and business partners – while being fully aware of our responsibility toward society and the environment,” Müller continued.

“TOGETHER – Strategy 2025” provides the framework and compass for the Volkswagen Group’s envisioned evolution from car manufacturer into a world-leading provider of sustainable mobility. It will be fleshed out with corresponding strategies for the Group brands to be gradually elaborated over the coming months. Volkswagen will present the detailed strategic program, broken down into brands and functions and backed up with specific measures and financial targets, before the end of the year.

This also includes the Volkswagen brand’s “pact for the future”, which the Brand Board of Management and the Works Council have been working on since early June. It involves significantly increasing efficiency, productivity and profitability with the aim of safeguarding competitiveness and jobs, and financing the necessary future investments in products and locations. In light of the brand’s importance within the Volkswagen Group, it will also play a key role in achieving the Group targets.

Transformation of the core business

Today saw the presentation of the key building blocks in the new Group strategy which centers on transforming Volkswagen’s core automotive business or, to put it another way, making a fundamental realignment in readiness for the new age of mobility. For this, Volkswagen will sharpen the positioning of the Group brands and optimize the vehicle and drivetrain portfolio to focus on the most attractive and fastest-growing market segments. Furthermore, the Group’s current product portfolio of around 340 different model variants will be systematically geared to profitable growth, taking regional market and customer needs into account.

With regard to vehicles, and drivetrains, special emphasis will be place on e-mobility. The Group is planning a broad-based initiative in this area: it intends to launch more than 30 purely battery-powered electric vehicles (BEVs) over the next ten years. The Company estimates that such vehicles could then account for around a quarter of the global passenger car market. The Volkswagen Group forecasts that its own BEV sales will be between two and three million units in 2025, equivalent to some 20 to 25 percent of the total unit sales expected at that time.

Volkswagen is also to review and streamline its modular architectures in the context of generating profitable growth so as to reduce complexity in development and production, increase efficiency and thus make better use of the system’s economic merits.

The regional growth strategy already initiated in particularly attractive automotive markets is being continued. The Volkswagen Group is affirming its expansion and investment plans already announced for North America and its continued expansion program in China. In this context, the Volkswagen Group intends to tap the economy segment – i.e. the segment comprising attractively-priced entry-level products that is, for instance, especially relevant for Asia – by partnering with regional players. Talks in this regard are at an advanced stage.

New competencies

A further lever for transforming the core automotive business is to develop new competencies. The Group therefore intends to independently provide the resources necessary to address the future topic of autonomous driving and artificial intelligence. The aim is to license a competitive self-driving system (SDS) developed in-house by the end of the decade.

In light of the rapid gains in market volume and unit sales of electric vehicles over the coming years, the Volkswagen Group is also to develop battery technology as a new competency. The strategic options for participating in the potential revenue stream associated with this and developing battery technology into a new Group competency will be carefully examined.

Entrepreneurial mindset and approach

Transforming the core business also encompasses systematically promoting an entrepreneurial mindset and approach in the Group. Alongside gradually implementing the model line organization at the Group brands, this primarily involves realigning the components business, which currently accounts for around 67,000 employees at 26 locations worldwide. The relevant activities are to be systematically combined across all brands and strategically realigned. The Volkswagen Group hopes that realigning the components business will strengthen competitiveness, increase efficiency and make significant contributions to future topics such as the e-mobility initiative.

The Volkswagen Group will resolutely pursue the future topics in both the passenger cars and commercial vehicles segments. For its commercial vehicles business, which currently comprises the Scania, MAN and Volkswagen Commercial Vehicles brands, the Group is reaffirming its strategic goal of creating a global champion. The plan is for Volkswagen Truck & Bus, as a multi-brand provider across the cycle, to become the most profitable company in the sector, with a significant presence in all key regions of the globe. These targets are to be achieved firstly through much closer cooperation between the commercial vehicles brands and, secondly, by enhancing the group’s overall performance as well as expanding its global footprint. New business models will also play a decisive role in this. In the medium term, the business unit will increasingly evolve from a purely commercial vehicles manufacturer into a provider of intelligent transportation solutions.

Under the strategic realignment of Volkswagen, the Financial Services Division will also be a significant source of earnings for the Group and a mainstay of its brands’ success.

“Developing, building and selling vehicles, including the related financial services, will remain essential for the Volkswagen Group going forward. However, the transformation we have initiated today will permanently change the face of our core business, ensuring that we remain a leading player over both the medium and the long term. As is traditional in the Volkswagen Group, we will take a responsible, collaborative approach. Such far-reaching change as we have set out to achieve is only possible together,” said CEO Matthias Müller.

Mobility services as additional growth driver

The second key building block of “TOGETHER – Strategy 2025” alongside the transformation of the core business involves the establishment of a cross-brand mobility solutions business. The new unit will develop and acquire offerings tailored to customer requirements – centering on and starting with ride hailing, i.e. on-demand mobility services. Other services such as robotaxis, carsharing and transport on-demand will then be grouped around this nucleus. The Volkswagen Group already secured its first foothold in the ride hailing segment at the end of May, when it invested in a strategic partnership with on-demand mobility company Gett.

In a rapidly expanding market, Volkswagen’s aim is for the new mobility solutions business unit to generate sales revenue in the billions by 2025.

Both the transformation of the core business and the new Group mobility solutions unit require Volkswagen to strengthen its traditionally excellent innovation power and place it on an even broader footing. The Group is driving forward with digitalization across all areas and brands. At the same time, the Company will rely to a greater extent than before on partnerships, acquisitions and venture capital investments. In the future, investment selection will be managed centrally so as to generate maximum added value for the Group and its brands.

Significant efficiency improvements

In total, Group-wide investments in future topics under Strategy 2025 are expected to be in the double-digit billion range. To ensure they can be financed, operational excellence above all is to be increased significantly across all divisions and functions. At the Volkswagen brand in particular, the Group will thus strive to unlock the efficiency potential, which by industry standards is considerable. This goes for the entire value chain in the automotive business, from product development through sourcing and production to distribution.

More specifically, the Volkswagen Group is aiming for a ratio of capex to sales revenue in the automotive business of 6.0 percent by 2025. The efficiency of research and development expenditures is also to be significantly improved; the ratio of R&D costs to sales revenue is likewise to be reduced to 6.0 percent. In addition, selling, general and administrative expenses, which as a percentage of sales revenue have increased significantly in recent years, are to be reduced to under 12 percent. Overall, based on the figures for fiscal year 2015, the Volkswagen Group expects more efficient use of resources to generate the potential for a significant annual improvement in earnings. The individual measures at Group, brand and divisional level will be set out in greater detail in the coming months.

Additional funds for future investments can also be generated by optimizing the existing portfolio of brands and equity investments.

Financial targets amended

“Strategy 2025” is backed up with amended financial targets. “In line with being systematically geared to generating profitable growth, the focus is clearly on earnings power. Over the coming years, we will do all we can to continuously create value for our shareholders based on a solid financial position,” explained Chief Financial Officer Frank Witter. For the Group’s operating return on sales, which in 2015 stood at 6.0 percent before special items, the aim is an increase to between 7 and 8 percent by 2025. The return on capital employed in the Automotive Division is then intended to be more than 15 percent. The payout ratio to shareholders is to be sustained at around 30 percent of net profit.

“The Volkswagen of the future will inspire its customers with fascinating vehicles, financial services tailored to demand, and smart mobility solutions. We will be a technology leader and role model when it comes to environment, safety and integrity. The Group will achieve competitive profitability, and so remain both an attractive investment and an excellent, reliable and secure employer. In short, Volkswagen will be an enterprise we can all be proud of,” said CEO Matthias Müller in summary.


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About the Author

is tryin' to help society help itself (and other species) with the power of the typed word. He spends most of his time here on CleanTechnica as its director and chief editor, but he's also the president of Important Media and the director/founder of EV Obsession, Solar Love, and Bikocity. Zach is recognized globally as a solar energy, electric car, and energy storage expert. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in.



  • Doug

    Hmmm…”Finally, if Muller still wants VW to be world’s largest automaker, he should also shift the overall strategy of the company away from diesel and help the company get over its irrational skepticism towards electric powertrains. This could be the ultimate silver lining in the proverbial cloud for them. The rest of the automotive industry believes that electrification is needed to power the cars of the future. VW has historically been against electrification and argued that clean diesel was a better solution. Muller should direct VW’s engineering organization to participate in this race for the future. VW’s scale, resources and technical expertise directed at electrification would help increase the EV and PHEV vehicles on the road and the same time drive down costs faster to achieving parity with internal combustion powered vehicles, a technology of the past.” Margo Oge, Former EPA Director, 11/9/15 http://margooge.com/the-silver-lining-in-the-vw-emissions-cloud/

  • super390

    The shape of the Volkswagen XL1 needs to be used as the basis for an all-steel EV sports coupe. Once you prove that cruising at 100 watt-hours per mile is possible, then VW doesn’t have to mess with advanced batteries.

    • stuart21

      If an XL1 could do 100 whr/mile, what would an XL1 station wagon do?
      Need a useful vehicle –

  • JamesWimberley

    The list of all-electric competitors includes one real manufacturer, Tesla, and a gaggle of rich wannabes. Curiously it omits BYD, another real manufacturer though largely confined to China.

    The short list of pure EV players helps explain the caution of the incumbents. The rivals they fear are each other. Every move by GM, VW, Renault or Hyundai puts more pressure on Ford, Fiat-Chrysler, Toyota and Peugeot-Citroen. This is a positive-feedback loop. Things are speeding up.

    • Yes, I was thinking that this announcement from Volkswagen probably has more effect than Tesla’s plans for 1 million cars a year by 2020. The established OEMs can always pretend Tesla is on the verge of collapsing.

    • Ross

      If the legacy ICE makers all keep looking at each other they’re dead.

      I’d take it that they don’t mention Tesla and BYD because that’s who they fear the most.

  • Bob Fearn

    Hummmm, everyone seems very willing to forget what a criminal organization did and I’m taking about building IC cars when they could have led the change to BV cars years ago.
    So the big car producers are between a rock and a hard place. We are supposed to feel sorry for outfits that still produce and promote millions of rolling bricks?
    Apparently it is still not understood by many that we cannot continue to piss around with our meager climate change mitigation efforts. Either 100% of the worlds climate change scientists are right or they are wrong. Take your pick.

    • Good points. I didn’t insert my personal opinion in there on that. I’m not going to be buying a Volkswagen, but I think the general public simply doesn’t pay much attention or care. Volkswagen sales should have completely tanked if they did.

      • Bob Fearn

        Not caring is one of our biggest problems. Most American’s don’t care that over 2 million people, who never threatened or attacked America, were murdered by America in SE Asia. Most Americans don’t care about climate change which will affect them and this lack of empathy is getting worse.
        Without empathy we can ignore a military that costs trillions and has not won a war since WW2. Caring is essential if we are to survive.

        • Agreed.

        • super390

          What’s more despicable is selective empathy. Remember “Baby Jessica” in a well, versus all the babies who have died from abuse or malnutrition ignored by TV audiences. I think most of us aren’t capable of empathy in the abstract, but if you put a face and a narrative on something we are willing to unleash our emotions and be manipulated.

        • neroden

          Intelligence and lots of accurate information make a good substitute for empathy — think “enlightened self interest” — but those are in pretty short supply too. 🙁

  • Brooks Bridges

    Great article. I agree with phineasjw; could be ironic if diesel gate saves them by forcing move to EV’s.

    Wondered what stock price has been doing. Surprised to find “only” a factor of two drop from high of $230 last April 2015. Low was $100 around Oct 2015 and now up to $230. Surprised diesel gate didn’t hurt it more.

    • Matt

      I think most stock holders, are making two assumptions.
      1) German government will NOT let VW fail
      2) USA as a close friend to Germany, will place fines at the low end.
      Since in EU it is legal to turn off all emission controls during times that impact life of car or driving, they will not be fined there. Just check death rates per 1000 in EU cities from pollution, 3x USA and worse than either China or India.

      • Ulenspiegel

        “…and worse than either China or India.”

        BS, but you know it, don’t you?

  • stuart21

    Funny thing is, I have a new EV driveline I would like to show them – but they say ‘go away’ and ‘go and get a patent’.
    Maybe I announce mine the day after they show us the results of their megabuck spend, to show them how much they have just wasted? 😉

  • Roger Lambert

    “conventional automakers are stuck between a huge rock and a very hard place. If they transition to electric vehicles very quickly, they lose expected revenue … However, if they don’t transition to electric vehicles quickly…the(y) get absolutely wrecked and have to ask their governments to bail them out.”

    One would think a strong governmental directive/incentive/quota/executive order mandating a rapid ICE phase-out and an EV phase-in might actually be welcomed by the manufacturers.

  • Even Proberen

    The most difficult thing in any organization is changing the mindset. And the change from ICE to EV is an equivalent of a lobotomy (all while being conscious and performing your daily tasks!).

    Big manufacturiers change to EV was never about the money – it was about the people, their grasp of the necessity for drastic change and willingness to take that step.

    I urge all of you to think for a moment about secondary and tertiary consequences of this VW decision (could be a subject of a nice article, Zachary).

    What will happen with all the VW dealers and their lucrative repair business when ultra low maintenance VW EV’s start showing up?

    What will happen when someone in VW realizes their spare-part business is shrinking dramatically due to EV’s needing much less maintenance?

    What happens when they realize that third parties are eating into profits with their thriving battery upgrade business (speculation on my part – but quite possible, imho)?

    And of course – to whom they will sell millions of their cars if no one will be buying them (why rent a self driving Golf or Passat if I can rent a Tesla to take me from home to my meeting in downtown)

    • Great analogy at the top.

      And agreed on the other stuff. That’s also why I think the $11 billion battery factory is such a strong move. It’s VW saying that it aims to really make this shift.

      • Even Proberen

        Thank you, Zachary – I would like to see detailed plans how they plan to tackle charging – as all those EV announcements (for example Porsche) are missing information on this crucial issue.

        • DEFINITELY!

          (Apologies to Bob for using all caps.)

          • Greg Hudson

            Bob would not dare comment 😉

          • Bob_Wallace

            Oh yeah?

            Cut it out Shahan. NO MORE WARNINGS!!!

    • Calamity_Jean

      “why rent a self driving Golf or Passat if I can rent a Tesla to take me from home to my meeting….”

      Two reasons I can think of immediately: the Tesla costs more, or the Tesla isn’t available at the time you need to make the trip.

  • Ivor O’Connor

    Imagine a Beetle with battery as the flooring. No more rolling over like the old bugs did. Go Kart acceleration. It could become the world’s best-selling car all over again. Then do the same thing with their Golf, Jetta, and Passat. VW will dominate the BEV market. If their stock can be bought when it is down after the rulings against it and before their BEVs take off one could make a lot of money.

    • stuart21

      Ivor, the rolling over problem was mostly a result of the swing axle suspension.
      However, the beetle is also quite an inefficient design from the point of view of road space, material use, & ergonomics.
      Better to use a newer design – say Golf –

      • Ivor O’Connor

        Thanks. I never took the time to figure out why but now that you mention the suspension it seems obvious.

        I’ll take your word on the road space, material use, and ergonomics. However it is an iconic car. It’s not going away and people would willingly buy them again if BEVd.

    • Yeah, I think an electric Bug would blow up — wonder if VW is working on that. Would assume so.

      • jeffhre

        Kodak was working on that…VW was lucky, some of their leaders actually see what they have to do.

        GM and Chrysler were working on changing so much, so often, for so long that real change became meaningless to them. Ford saw that they could not compete much longer and mortgaged everything (including the blue oval) to finance improvements. GM and Chrysler imploded, and Ford found itself with just enough capital to survive the downturn.

        Will OEMs change and survive? Will governments decide to keep them on life support again long enough to reorganize? GM, Toyota and VW each took their turns at the top of the automotive sales world. Toyota reacted decisively to become the best of the hybrid world. VW the deisel leader. Now Toyota is the last OEM that does not see a need to change.

      • kerrywebster
  • NRG4All

    Wow! Volkswagen must have awfully deep pockets to be that aggressive when they are sure to spend probably billions to clean up the diesel scandal. I hope they succeed but I’m a little skeptical that some of this effort may just be to lessen the penalties from the diesel scandal. Time will tell.

    • It’s definitely a tightrope walk.

    • Jenny Sommer

      They did pay nothing up till now.

  • phineasjw

    Truly ironic that Dieselgate could be the thing that actually SAVES the company.

    If you believe EVs are inevitable, then crazy as it sounds, BMW, Fiat/Chrsyler, Toyota are all potentially in more long-term trouble than Volkswagen.

    • Jenny Sommer

      Where are those millions of EVs coming from if not from Toyota, VW, GM….?

      • Ross

        BYD.

        • Jenny Sommer

          That’s China. Volkswagen is leading sales in Europe.

          • Ross

            Currently. Most of Europe has no strong loyalty to buying cars from the Germans, Japanese, or Americans.

          • Jenny Sommer

            They still got a broad range of PHEVs and are extending that.

            There is no BYD vehicle sold in Europe apart from some small importers selling the E6.
            Chinese are selling cars via bought up brands like Volvo in Europe.
            I don’t think you can buy an E6 in the US either.

          • neroden

            That’s what they said about Japanese cars in the 1960s. In the 1970s, Japanese cars dominated the US market.

            Chinese cars can do the same thing. Don’t be surprised if it happens.

          • Harry Johnson

            Yep. You jump technology, who cares about legacy automakers whose reputations are, well…

  • neroden

    Desperation. The established automakers weren’t willing to abandon their profitable ICE factories to make EVs. But now VW is watching its ICE business disappear overnight, so they HAVE to change. They’re willing to take the risks *because* Dieselgate is destroying them.

    • Shane 2

      Pure EVs are only a few % of global sales. But they will dominate eventually. I predict rain but I won’t give you a timeframe.

    • Armen Hovannesjan

      Exactly! Dieselgate worked as a catalyst.

      With the latest announcement VW has made a very good tactical move to re-gain its strategic positions. Actually it is less about money they are loosing (VW has enough capital at its disposal to survive even three Dieselgates), but more about their blotted image desperately suffering since the
      Dieselgate breakout. Thus, their primary step could only be – to save the Group’s reputation.

      With the adopted “New Group Strategy” (quite a feasible one) VW is on the fast way to cure the worst headache it has ever had in its history.

    • Eric Lukac-Kuruc

      As far as I can see, here in Europe, Volkswagen is getting away mostly unharmed. Big politics is in bed with big money under the false pretense of saving jobs – as usual.

  • Jason hm

    Argentina is starving for foreign cash and rich in lithium. Volkswagen could make some great deals especially if they sweetened the pot with a local battery production facility.
    You really cannot be a leader in the electric car business without being a battery player as well.

    • Shane 2

      Lithium is 5 %of a lithium ion battery cell by weight and 2.5% of a car battery pack by weight. High energy density cells such as those used in cars use cobalt in the cathode. An analysis I read recently indicated that cobalt is more resource constrained than lithium.

    • “You really cannot be a leader in the electric car business without being a battery player as well.”
      –Agreed. And it looks like Volkswagen gets that, presuming the $11 billion battery factory is for real.

      • Jenny Sommer

        I don’t agree. The battery factory is only to compensate for the loss of other production in communities that depend on these jobs and which happen to be big VW shareholders.
        A battery factory alone is a risk.

        • You can’t really get the necessary economies of scale at this point without doing it yourself. The battery companies seem to want demonstrated demand before they are going to ramp up demand. It’s the old chicken and egg story, imho, and companies that want to lead have to make the egg.

    • juxx0r

      150 thousand tonnes of lithium carbonate needed by just volkswagen in 2025, that’s roughly 170% of all battery lithium feedstocks in 2015.

  • Many typos in this article. Change:
    “etc.), the get absolutely wrecked”
    to:
    “Atieva, etc.), they get absolutely wrecked”
    Change:
    “or you could day such a move”
    to:
    “or you could say such a move”
    Change:
    “making electric cars absolutely, without any doubt better than gas cars”
    To:
    “making electric cars absolutely, without any doubt, better than gas cars”

    • @ZShahan3:disqus

    • Sorry. I knew I should published at the end of the night as my eyes were dropping, but wanted to get it out sooner than later. Thanks for the edits.

      • stuart21

        I don’t think anyone can proof their own writing – even if wide awake!
        However, something you can do if no second party is available – have your computer read it back to you. Surprising what you can pick up!

        • It typically works fine for me … when I do it. But some things certainly slip through the cracks from reading it as I thought I wrote it (and not seeing a typo).

      • NRG4All

        I have the same trouble. Fortunately or unfortunately I learned touch typing in High School over 50 years ago and have been typing ever since. Thus, I don’t think about my fingers at all and sometimes it goes on the paper at about the same speed I’m thinking. Occasionally I even drop out a word when my fingers can’t keep up and I never realize it until I proof read it. Thanks for all you do Zach.

        • Indeed. And I typically try to proofread everything a few final times, but this one was a bit rushed.

    • JamesWimberley

      And it’s shoo-in not shoe-in.

      • Ha, interesting. That wasn’t a typo. I thought it was “shoe-in” and came from golf 😛 Just learned something. 😀

  • Oh yeah, note that Volkswagen CEO Müller is the same guy who said not too long ago (while CEO of Porsche) that he didn’t know anything about Tesla. I have a feeling he was talking nonsense at that time….

    https://youtu.be/aD4GcDoN98E

    • Ivor O’Connor

      Müller was probably having a bad day. But good catch. Hopefully Müller isn’t always so inept.

      • Maybe that’s all it was.

        Or maybe he just didn’t have anything bad to say about Tesla but didn’t want to send more Porsche customers Tesla’s way. But if it’s this, that’s still lame.

        • Ivor O’Connor

          I know I constantly do shit like Müller. It’s not that I’m trying to lie or am totally inept. Though I know quite a few who would disagree. What I appreciate most is when people point it out so I can then fix my problems. Self editing is so hard to do.

          • Harry Johnson

            Ivor, you are a really good guy.

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