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Volkswagen aims to source electric vehicle batteries from China in just a few years.

December 3, 2011

As I mentioned in my previous posting, Volkswagen Group’s Dr. Tobias Giebel, head of the Volkswagen Research Lab in Shanghai, sounded quite optimistic about the potential to develop a battery supplier base in China at the EV Battery Forum in Shanghai in November. Of course, it behooves him to sound optimistic—it is his job to develop that supplier base and one always likes to feel as if they are successful at their job.

Volkswagen  is working closely with about 20 of China’s than 100 battery producers, and is already seeing improvement, he said.  “We think in a couple of years we will have really strong suppliers in fully domestic companies,” said Giebel.  When they are up to global standards, Volkswagen will use the same Chinese source for its Asia, Europe, and the United States operations, he said.

Today, China’s lithium-ion battery makers are focused on consumer technology, said Giebel.  Its automotive-grade batteries are not up to the high-level vehicle traction battery manufacturers in Korea or Japan, he said.

But, “we are observing in these days our first success of the Chinese suppliers,” said Giebel in a later email communication.  “Therefore we are optimistic that Chinese vehicle traction battery cells will become competitive soon.”

He added:  “We will not accept lower safety, quality, or performance for our Chinese business.”

A Chinese company that can meet Volkswagen’s standards could have the opportunity to facai le (get rich). That’s because VW Group will use the same battery module design for all its electric vehicles globally across all its brands, said Giebel. And the battery modules (and cells in them) are likely to be sourced from China, he said.

“The module shape and number of cells will be the same,” said Giebel.  “The module is not part of any international norm. It is a company internal standard.”

That means all hybrids, plug-in hybrid electric, battery electric, and fuel cell vehicles produced under the Volkswagen Group’s 10 nameplates, which include Volkswagen, Skoda, Audi, Seat, Bentley, Porsche, Scania, Bugatti, Lamborghini, and Volkswagen commercial vehicles.

Inside the module, Volkswagen might adapt the connection between the cells to vary the number of parallel and serial cells, said Giebel. The module is a company internal standard, he added.

As Volkswagen’s current parallel hybrid models, including the Tuareg SUV, have a different technology, Volkswagen will use the standard module concept first on battery electric and plug-in hybrid electric models, said Giebel.  “The extension to parallel hybrid (HEV) will be decided later,” he said.

Giebel may be feeling a bit or pressure to bring those Chinese suppliers up to speed.   Volkswagen recently said it would begin producing two electric vehicles with its Chinese partners as soon as late 2013.   Volkswagen partners with SAIC and FAW   in China. Both are large state-owned enterprises. Each has produced a prototype electric vehicle with VW and launched its own EV sub-brand.   Each also has its own captive supplier group, but I’m sure that won’t play a role in supplier selection….


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