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Volkswagen requires about 300 gigawatt hours (GWh) worth of battery cells a year by the end of the decade for its ambitious roll out of electric vehicles in Europe, Trend reports citing Reuters.
The supply chain update is part of the world’s second-largest carmaker’s strategy to raise the share of fully electric vehicles in Europe to more than 70% by 2030 at its core brand, details of which were unveiled last week.
So far, Volkswagen, which sources batteries from LG Chem, Samsung SDI, SK Innovation and CATL, expects annual demand in Europe to be more than 150 GWh from 2025 and to be at a similar level in Asia.
Current demand is still low given that electric vehicle sales are still quite modest.
The fresh target comes as Volkswagen accelerates its push into electric mobility to close a gap with Tesla, efforts that have led the group’s preferred stock price to hit its highest level in nearly six years this week.
Bernstein analyst Arndt Ellinghorst reckons Volkswagen needs 420 GWh worth of battery cells globally by 2030 if it wants to sell 7 million battery electric vehicles, requiring more than 20 billion euros ($23.8 billion) in annual spending.
Raised targets for electric vehicle expansion at other carmakers are likely to trigger a supply shortage of battery cells in the medium term even though capacity is being expanded globally.
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