Volkswagen Halts Plans for Electric Car Battery Factories

The electric car market is slowing down; this is a reality. Since Germany, Europe's largest car buyer, decided to eliminate incentives for zero-emission vehicles at the end of 2023, sales in the country have plummeted, dragging market share down with them.

By the end of June, electric vehicle penetration had decreased by half a percentage point to 13.2%. Adding to this is the fact that these propulsion systems are essential for manufacturers to meet Brussels' environmental targets, and currently, all are above the average of 93.6 grams of CO2 per kilometer traveled.

Therefore, brands are beginning to reconsider their electrification goals, especially in the industrial sector. In an interview with the German newspaper Frankfurter Allgemeine, Volkswagen Group's Chief Technology Officer, Thomas Schmall, stated that they were reviewing their plans to expand their electric car battery factories.

Originally, the German consortium intended to build six plants to support its ambitious electric offensive—they aimed to be the world's leading manufacturer of such vehicles by 2030—with four in Europe and two in America, with a production capacity of 240 GWh annually.

"The expansion of these plants will depend on how the global electric car market develops," Schmall declared. "For now, we plan to reach 170 GWh with the plants in Sagunto (Valencia), Salzgitter (Germany), and Ontario (Canada)."

These factories are being constructed modularly, in 20 GWh blocks. If necessary, the group could increase the capacity of the three up to 200 GWh, particularly in Spain and Canada. "Expanding in Salzgitter will be more difficult due to space limitations," he stated.

Regarding battery chemistry, Schmall did not take a position. Currently, their electric models use a nickel-manganese-cobalt (NMC) composition, but manufacturers see lithium-iron-phosphate (LFP) as a viable alternative to reduce component costs and thus vehicle prices, an essential factor in adopting these models.

"At the beginning of electric mobility in Europe, the priority was achieving maximum range, so NMC was chosen," Schmall noted. "But our plants are designed to switch to LFP within a few weeks."

By 2025, when the Sagunto plant is expected to be operational, the German group will launch three small models based on the same platform (Volkswagen, Skoda, and Cupra) manufactured in Spain and supplied by this factory.

Additionally, Schmall indicated that his company would produce solid-state batteries "this decade." This type of composition is considered the next frontier in electric mobility, allowing for greater range and charging speed due to its higher energy density.

In the interview, Schmall was clear: "The future belongs to electric mobility. Although we are analyzing synthetic fuels, they will not be available in mass-market quantities or at affordable prices."