Volkswagen plans to invest in mines to bring battery costs down

Volkswagen Group plans to invest in mines in order to reduce the cost of battery cells, meet half of its own demand, and sell to third-party customers, according to Reuters, citing Thomas Schmall, the carmaker’s board member in charge of technology.

PowerCo, Volkswagen’s battery unit, will start by delivering cells to Ford for the 1.2 million vehicles the US carmaker is building in Europe on Volkswagen’s electric MEB platform, the report said.

Long-term, Volkswagen plans to build enough cells to meet half of its global battery needs, with most production capacity located in Europe and North America.

“The bottleneck for raw materials is mining capacity – that’s why we need to invest in mines directly,” Schmall told Reuters in an interview.

The carmaker has partnered on supply deals with mining companies in Canada, where it will build its first North American battery plant. PowerCo, set up last year, is targeting US$21.22bn in annual sales by 2030.