VW plans electric car battery-supply factory to rival Tesla

Volkswagen is planning to launch more than 20 electric or hybrid vehicles across the group by 2020, ranging from a high-performance Audi crossover and Porsche sports saloon to an electric hatchback that is set to rival the Golf and be as affordable as a petrol or diesel car.

To make this plan work, and to further distance itself from its diesel dilemmas, VW needs batteries – lots and lots of batteries. However the market for complex lithium-ion battery packs is currently dominated by three major companies; Samsung and LG Chem of Korea and Panasonic of Japan.

VW does not want to be beholden to any of these (and of course they also supply batteries to major competitors) so it has hatched plans to build a massive battery factory to supply its own needs.

In doing so, it will rival Tesla, which has built its own so-called "Gigafactory" in the desert of the US state of Nevada. VW will likely have to follow suit, or possibly find a site in China or elsewhere in Asia, because of environmental concerns over battery production.

While electric cars may reduce our outputs of CO2 into the atmosphere, the batteries they require have been cited by the US Environmental Protection Agency as having the "highest potential for environmental impacts".

Mining for the nickel and cobalt used in the batteries is a huge concern, as is potential local pollution from construction of the batteries. Finding a suitable site in continental Europe would probably prove impossible. Nevertheless, VW is pressing ahead and will put together a multi-billion-euro investment. German newspaper Handesblatt quoted an unnamed VW insider as saying: "We want to launch a major initiative, one that will put us at the top of the industry."

Tesla’s vast Nevada factory was built with the help of Panasonic, which predicts that the factory will be operating at close to a 100 per cent recycling level in constructing its batteries in the next few years. This may help allay some of the concerns over environmental impact.

Tesla apparently has major over-capacity in its Nevada plant, even with the massive number of orders for its upcoming Model 3 saloon, which may make for good news for other car makers keen to add electric vehicles to their line-ups, but not keen on making a massive factory investment.

One such is PSA Groupe, whose Peugeot and Citroen brands are lining up to launch a raft of new all-electric vehicles, with a one-charge range of up to 450km. PSA will use two basic platforms for these new vehicles.

The EMP2 chassis is already in production under the Peugeot 308 and Citroen C4 Picasso and was designed from the start for adaption to electric power, while the new CMP, or Common Modular Platform, has been designed in conjunction with PSA’s Chinese part-owner, Dongfeng, and will underpin the next generations of Citroen C3, Peugeot 208 and DS 3, as well as small crossovers such as the 2008 and C4 Cactus.

The first will be a 115hp hatchback with a 50kWh battery, which should give the all-important 450km range. A 7kW on-board charger can add 100km of range for every 90 minutes charging from a conventional source, or an 80 per cent charge in three minutes form a fast-charger.

PSA will also being to roll out plugin hybrid models, based this time around a petrol engine, rather than the old HY4 diesel hybrid models unsuccessfully launched in the 3008, 508 RXH and the DS5 Hybrid. The new plugins will feature PSA’s 110hp 1.2-litre turbo PureTech petrol engine, combined with a 13kWh battery and the choice of front- or all-wheel drive. Maximum overall power outputs will be 250hp for the front-drive models and 300hp for the all-wheel drive versions, although the possibility of a 500hp plug-in hybrid version of the 308 GTI is still at large.

Electric-only range on a fully charged battery is expected to be 60km. The first of these new plug-ins is expected to be based on the just-revealed new Peugeot 3008.