CEO of Volkswagen Herbert Dice. (Photo = Volkswagen)
“We’re combining mobility and energy in a innovatve way.”
On the 15th (local time), Volkswagen CEO Herbert Dice emphasized the’innovative combination of mobility and energy’ at the’Power Day’ held in Wolfsburg, Germany. Power Day is an event inspired by Tesla’s’Battery Day’, which is the world’s second largest EV market share.
On this day, Volkswagen announced a technology roadmap for the battery and charging sector, which will be pursued by 2030. The key is cost reduction through’battery internalization’, and the related industry explains that the’shock wave’ to be thrown at global battery makers is significant. There are three main points. First, it became clear that’A’ among battery makers and finished car makers is a finished car maker. Second, the partnership required for automakers is an energy company (charging infrastructure). Third, an all-solid-state battery, a next-generation battery, will soon be commercially available.
In the era of electric vehicles, battery makers are getting more and more corporate value, and Volkswagen’s announcement on that day suggests that battery makers will soon become’maturity’.
Electric vehicle battery’demand, supply mismatch’… Still,’A’ is a finished car company
According to market research firm SNE Research, sales of electric vehicles are expected to increase by 21% every year. Accordingly, global automakers’ battery demand is expected to increase by 30-50% every year. There is also a forecast that demand for electric vehicle batteries will outpace supply in 2025. For this reason, there were many prospects that the needs of automakers for’high-performance batteries’ that are safe and have high output will increase.
Unlike internal combustion engine vehicles, electric vehicle performance depends on the so-called’heart’ battery, and there is an analysis that it is a’supplemental material’ that increases the fuel economy of the vehicle body and improves convenience during driving. In this regard, there were also observations that the relationship between automakers in the electric vehicle era and battery makers, which are key suppliers, will be reversed. It is an analysis that automakers will reinforce strategic partnerships with battery makers in order to install high-performance batteries, or will line up with companies to meet the delivery date.
However, the relationship between Tesla and Volkswagen became clearer as they declared’battery internalization’. Both companies are’top tier’ companies based on global market share. Tesla secured a 17.5% market share in terms of sales from January to September last year, ranking first, while Volkswagen secured a 12.9% market share. Tesla sold 300,000 units worldwide last year, and sales are expected to exceed 1.42 million units in 2025 and 3 million units in 2030. It is expected to grow at an annual average of 24%.
Volkswagen sold 280,000 units worldwide last year, with sales expected to exceed 2.65 million units in 2025 and 6 million units in 2030. It is expected to grow at an annual average of 38%.
Electric vehicle batteries account for 30% of the cost, so if they are selected as suppliers of the two companies, they can naturally expand their battery market share. However, both companies have set up strategies to internalize batteries. It plans to lower the vehicle sales price by producing the battery directly, and increase the sales volume with price competitiveness.
In addition, Volkswagen announced on the battery day that it will install a square shape instead of the existing pouch type in its electric vehicles in the future. Volkswagen’s electric vehicles were mainly equipped with pouch-type batteries. LG Energy Solution and SK Innovation were selected as battery suppliers for Volkswagen’s European and US plants, respectively. However, on this day, Volkswagen announced that it would mount a square battery instead of a pouch type. Prior to Power Day on the day, it was also notified to three domestic battery companies.
There are three types of batteries for electric vehicles. There are pouch types in the form of squares, cylinders, and flat pockets made up of a square frame. The prismatic battery has high space utilization and durability, but the disadvantage is that it is heavy and difficult to increase in size. The pouch type can be stacked in various shapes, but it has been pointed out that it has poor stability and durability.
Global electric vehicle demand. (Source = SNE Research)
Volkswagen is expected to receive prismatic batteries from China’s CATL and North Bolt. North Bolt is a company founded by an employee from Tesla, and Volkswagen created a joint venture with North Belt,’North Bolt’s Way’. SK Innovation made a plan to become a global electric vehicle battery company through Volkswagen, but it was virtually frustrated. It has major automakers such as Hyundai Motors and Ford, but it was suddenly excluded from Volkswagen’s’supply chain’, which put a brake on its growth.
Volkswagen plans to build six 40GWh battery plants in Europe within 10 years. The total capacity is expected to exceed the production capacity of global battery makers at 240GWh. 240GWh is a scale capable of producing 9.6 million electric vehicles annually.
An official from the battery industry said, “It was expected that the battery supplier and the finished car company would solidify the strategic cooperation relationship due to the expected shortage of battery supply. Depending on the strategy, we will be able to change battery companies at any time.”
Volkswagen electric vehicle sales forecast. (Source = SNE Research)
Refiners such as’BP, Enel’ who received Volkswagen’s love call… Cars are interested in charging infrastructure rather than batteries
Volkswagen announced that it is cooperating with energy companies such as British BP, Spain Iberdrola, and Italian Enel to establish a’high-speed charging network’. All three companies are European refiners and have local gas stations. Volkswagen said, “The Volkswagen Group’s battery strategy is progressing in conjunction with the expansion of the fast charging network.”
Volkswagen has announced that it will build 18,000 charging stations by 2025. This is five times the size of electric vehicle charging stations in Europe, and is about a third of Europe’s total demand. Volkswagen plans to build 8,000 units with BP to build electric vehicle charging stations, and 4,000 units with Aral. Volkswagen announced that it will invest 400 million euros (540 billion won) to expand the charging infrastructure in Europe.
In addition, Volkswagen has set up a joint venture to build charging infrastructure in Europe and China. Electrify America plans to build 3,500 charging stations by the end of this year, and the joint venture CAMS will build 17,000 charging stations by 2025. Volkswagen is establishing various partnerships with refineries to build the charging infrastructure.
For electric vehicles, it takes 15 to 30 minutes to fully charge. Unlike internal combustion vehicles, charging takes a considerable amount of time, so the key is to build a variety of charging infrastructure to allow charging anywhere. However, compared to the increasing sales of electric vehicles, the charging infrastructure is relatively slow. For this reason, automakers are building charging infrastructure in cooperation with energy companies such as oil refineries.
Oil refineries have gas stations everywhere, so if you install an electric vehicle charger, it can be converted into an electric vehicle charging station right away. This is to reinforce cooperation with refineries that have gas stations. Until now, it was known that automakers are strengthening cooperation with battery companies due to a shortage of battery supply, but the fact is that refineries are at the core of the partnership.
In Korea, four refineries, including SK Energy, Hyundai Oilbank, and GS Caltex, are working to convert gas stations into electric vehicle charging stations. By 2023, SK Energy will build 190 charging stations, and Hyundai Oilbank will build 200 electric vehicle charging stations.
The next-generation all-solid-state battery is’distant future’… Suddenly’strength’
Volkswagen said in a press release that day, “The square cell is the best condition for the group to switch to an all-solid-state battery that the group expects to make a leap forward in the next five years.” Volkswagen has said it will show remarkable technological advances in all-solid-state batteries within five years.
All-solid-state batteries are evaluated as next-generation batteries by overcoming the technical defects of lithium-ion batteries, which are secondary batteries. All-solid-state batteries use solid electrolytes instead of liquid electrolytes, significantly reducing the likelihood of fire and explosion. Even in stability and durability, it is not commercially available due to output problems and low charge/discharge problems due to deterioration of ion mobility. The industry explains that when charging and discharging, dendrites are generated in the negative electrode material, which lowers the efficiency and shortens the lifespan.
All-solid-state batteries were developed in the 1980s, but they did not see the light. In 1991, when Sony in Japan developed lithium-ion batteries, it has become the mainstream of secondary batteries, and there are many prospects that lithium-ion batteries will become the mainstream in the next 10 years or more. In 2010, when Toyota of Japan presented the concept of an all-solid-state battery using sulfide, the development of related technologies is also being competitively led by automakers. Toyota is the most technologically advanced. Toyota established a joint venture with Panasonic in January 2019 to develop electric vehicles equipped with all-solid-state batteries. Automakers such as Hyundai Motor Company are following.
Comparison of lithium-ion batteries and all-solid-state batteries. (Data = KDB Future Strategy Research Institute)
The battery industry predicted the possibility of commercialization of all-solid-state batteries centering on large buses in 2030. However, Volkswagen suddenly announced that it will show a more advanced technology within five years.
As Volkswagen mentions all-solid-state batteries on this day, competition among related companies is also expected to intensify. Currently, Solid Power, founded by the Colorado research team, has received investment from leading companies such as BMW, Ford, and Samsung Venture Investment. Solid Power plans to mass-produce all-solid-state batteries in 2023, and to mass-produce electric vehicles equipped with all-solid-state batteries from 2028.
China’s Qingdao Energy is developing all-solid-state batteries. In 2020, Samsung Electronics developed a technology that can solve the dendrite problem when charging all-solid-state batteries and announced it in’Nature Energy’, an international energy company. It is explained that reducing the thickness of the anode material and coating the nanoparticles increases the energy density and suppresses the generation of dendrite.
LG Energy Solutions is developing next-generation batteries including all-solid-state batteries by establishing the Advanced Materials Business Headquarters in April 2019. SK Innovation signed an agreement for joint venture development with Polyplus Battery Company in the U.S. in 2019. The two companies are working together to develop next-generation batteries such as all-solid-state batteries.
On this day, Volkswagen announced that it will advance the era of all-solid-state batteries and accelerate the end of lithium-ion batteries. It announced that it will confront the safety and fire risks of lithium-ion batteries with next-generation batteries. In the past, automakers made only cars, and energy sources announced plans to’internalize’ that they would escape from what refiners and battery companies had made.
The industry’s opinion is that the’shock wave’ thrown by Volkswagen will be equivalent to domestic and foreign battery makers.