If Tesla is Apple of electric vehicles, Volkswagen is betting it can be Samsung
The German giant is set to spend tens of billions of dollars trying to catch up with the US automaker
“Let me begin with the obvious: e-mobility has won the race,” Herbert Diess, chief executive officer of Volkswagen AG, said on Monday. “It is the only solution to reduce mobility emissions fast.”
Diess was speaking at an event VW dubbed “Power Day,” where the company laid out its big plans for beating Tesla Inc. and becoming the world’s largest maker of electric vehicles. Instead of talking about cars, design, or other customer-facing features, however, most of the splashy event was spent on a boring-looking thing that goes inside EVs: the lithium-ion battery.
That’s because batteries make up more than 30% of an electric car’s cost. And with every automaker looking to pivot to EVs, it’s not just about getting batteries at the cheapest price possible but securing enough supply to meet those ambitions.
The pivot won’t be cheap. VW announced it plans to build six battery factories across Europe by 2030, which BloombergNEF estimates would cost about $29 billion. It is also making investments in unifying the design of its battery and in recycling precious metals.
And yet, the world’s largest automaker is going to find it hard to beat Elon Musk. “Tesla will likely maintain its broad EV leadership,” Ben Kallo, an analyst at Robert W. Baird, wrote in a report. He walked away from VW’s hours-long presentation still viewing the Model 3 maker as having the upper hand with regard to batteries.
Venkat Viswanathan, an associate professor at Carnegie Mellon University and an electric-vehicle expert, also thinks Tesla’s drivetrains comprising both batteries and electric motors are four or five years ahead of the competition. They offer “the highest driving range for the same battery capacity,” he said.
Baird’s Kallo gives VW’s ambitions high marks—he’s just not convinced Musk will cede pole position. “We view Volkswagen as a potential leader in the ‘non-Tesla’ portion of the EV market,” Kallo wrote. “A non-Tesla EV ecosystem will emerge, similar to the non-Apple ecosystem in smartphones (i.e., Android).”
Apple Inc. built an ecosystem that integrates hardware innovations such as processing chips and camera sensors with software lock-ins like the iOS operating system and the App Store. It may have annoyed many users, but Apple has stuck with its proprietary lightning charging cable.
Source: livemint
