Spoiler alert: VW's electrification agenda involves batteries
Fresh from the German OEM’s “Power Day”, here are some of the main takeaways. For business enquiries, reach out at firstname.lastname@example.org.
In their “not a car presentation” this week, the VW Group made it clear they are accelerating their electrification agenda. Perhaps (definitely) inspired by Tesla’s Battery Day, VW also revealed their plans up to 2030 to make EVs viable for all consumers, addressing several pain points like cost, charging, and sustainability. The 2-hour event can be replayed here and slides are here, but read on to get the lowdown…
If you watched the event and felt an overwhelming sense of banality, you’d be forgiven. We are now firmly in the Era of Legacy Automakers Making EVs Big Business. These corporate presentations are as exciting as you’d expect from an enormous conglomerate, but one can view this as a positive — the fact that EV announcements are lacklustre affairs is a sign they’ve cemented themselves in the industry, and have, in fact, won the war against traditional gas-powered vehicles. This milestone also means that we need to closely examine big EV’s impact on the environment.
1. Unified Cell Formats
VW introduced a standardized prismatic form factor cell which is targeted for 80% of the VW product portfolio.
A “one size fits all” simplified cell design with flexibility/modularity provides economies of scale and enables high volume manufacturing required to lower costs by 30-50%. This design should also carry VW towards integrating their cell-to-pack and cell-to-car technologies.
How is it that the top OEM engineering teams have all arrived at separate cell-format paradigms? Tesla has famously backed chunky cylindrical cells, GM Ultium cells appear to be of the pouch variant, and now VW has chosen the hard-cased prismatic route.
Packing thousands of 18650 cells gives more lee-way for single-cell failures, but manufacturers of larger format pouch and prismatic cells must have achieved higher quality assembly rates. Prismatic cells can be more efficiently packed with better heat distribution and all cell arrangements will depend on strong cell balancing and battery management systems.
2. Un-unified Chemistries
VW’s chemistry plan is diverse. On the cathode, they plan to use LFP in their entry-level cars, Mn-rich cells at volume, and NMC for specific applications. On the anode, all options are kept open with mention of graphite, silicon, and of course, solid-state + Li-metal.
Unsurprisingly, VW hopes their endgame is solid-state. VW owns ~20% of startup QuantumScape, and plan to integrate the tech into future vehicles after 2025. Based on QS’ data, this will enable them to deliver +30% range with a 12-minute charge. While yet to be commercialized in consumer EVs, VW’s solid-state strategy is a key-differentiator that was ignored by Tesla’s own roadmap. Furthermore, does Northvolt’s acquisition of Stanford spinout Cuberg last week give VW access to their novel Li-metal technology, bringing many complementary technology benefits for VW.
The openness by OEMs to adopting diverse chemistries is indicative of noise in battery materials R&D innovation timeline.
3. $14B Northvolt Cell Supply
“Together with partners, we want to have a total of six cell factories up and running in Europe by 2030 thus guaranteeing security of supply” - Thomas Schmall, Member of the Board of Management Volkswagen AG, Technology, and CEO of Volkswagen Group Components
VW’s plans to open 6 gigafactories of 40 GWh capacity each in Europe, set to commence in 2023, and will consume about 190k - 210k tons of lithium per year. This announcement shows Volkswagen’s contribution to moving towards the European Green New Deal, and the first two factories to come online will be based in the Swedish cities Skellefteå (Northvolt) and Salzgitter. This includes a 10-year $14b supply contract with Northvolt to establish the Swedish gigafactory as its strategic lead supplier for premium battery cells.
The new contracts indicate a shift in supply, moving away from technology supplied under current deals from South Korea’s LG Energy Solution and SK Innovation. The two companies have been embroiled in a legal case over the last few years, and this is a clear step towards bringing battery manufacturing in-house and away from Asian suppliers.
4. OEM Cell Recycling and Localization
Also happening at Salzgitter: battery recycling.
VW shared animations explaining the contours of their recycling program at their Salzgitter pilot line. Here’s what we noticed:
In-house recycling: with all inputs, there’s never any confusion about the chemistry within cells. How will this affect the business case of independent battery recyclers?
The first step of the process is a deep discharge of the cells. The second step: shredding. Electrolyte evaporation and collection was also mentioned. Nice!
Hydrometallurgy will be the method of choice for purifying the black mass of metals after shredding. This as opposed to pyrometallurgy, which burns off the graphite, electrolyte, and separator to isolate the metals. Wastewater with hydrometallurgy will need to be managed carefully though.
95% for cell recycling rate was given, although it’s unclear if this is a proven yield (extremely doubtful) or a theoretical maximum.
5. Charging Infrastructure
The 2nd half of the talk was focused on electric charging infrastructure expansion, to signal to consumers and partners they mean business.
Local partnerships will streamline the charging/payment process and expand their reach, working with corporations like Ionity, Enel, and Iberdrola, as well as oil company BP in the UK, with the goal to operate 18k public fast charging ports in Europe by 2025.
Global goals include 3.5k ports in the US by end of 2021, and 17k in China by 2025 with its CAMS joint venture.
6. Industry Diversity?
Throughout the 2-hour presentation, we couldn’t help but notice the diversity (or lack thereof) of all the presenters. In stark contrast with their chemistry roadmap, VW’s battery leadership showed a stunning lack of diversity.
At Tesla’s battery day, they had a direct call for action to hire more talented engineers to join their battery team, but this was neglected by VW. The lithium-ion battery supply chain is an exciting and forward-thinking community of diverse individuals, and it is important in these presentations to demonstrate an event that is reflective of the industry.
Overall, how do VW’s battery innovations stack up?
Shashank Sripad provided a great comparison for Tesla Battery Day vs VW Power Day:
With Tesla and VW’s battery days done and dusted, who’s got next?
🌞 THANKS FOR READING!
If you enjoy this newsletter or know someone who would, please subscribe. For tips, feedback, or business enquiries, please email email@example.com.
About the writers:
Andrew is a PhD researcher at the University of Oxford (@ndrewwang). Nicholas is a business manager at UCL Business and Venture Fellow with Berkeley SkyDeck (@nicholasyiu). Ethan is a battery scientist with experience at startups, research labs, and EV manufacturers across the world (@ethandalter).