"Former VW Chief Diess expresses vindication over hesitation to invest in battery production, referring to the current struggles in the auto industry"
Revamped Perspective:
Herbert Diess, ex-CEO of Volkswagen, discusses the global race for dominance in the automotive industry, particularly focusing on Germany and China, in his write-up for "WirtschaftsWoche."
In his commentary, Diess points out that the swift technological advancement in China is resulting in a surge in the electric vehicles and plug-in hybrid market. While Volkswagen grapples with costly technology and slow development speeds in China, Chinese manufacturers, despite battling for the world's largest automotive market, have failed to meet export expectations. Diess also voices concerns about the intense competition and potential overcapacity in China, which might limit the sector's long-term profitability. However, he reiterates the importance of establishing a footing in the Chinese market for maintaining global competitiveness.
Diess's View on Chinese Manufacturer Cooperation in Europe
Now serving as the chairman of the supervisory board of chipmaker Infineon, Diess also shared his thoughts on battery development. Both BYD and CATL have made significant strides in high-speed charging iron phosphate batteries. The innovation paths of European and Korean manufacturers are reportedly being steered by Chinese battery suppliers owing to cost-effective technology that doesn't rely on expensive raw materials like cobalt or nickel. This development could pave the way for exceptionally rapid charging capability in the near future.
Diess expressed that even though some may have been hesitant to invest in battery production in Europe, it was a high entrepreneurial risk to keep pace with the rapid innovation tempo. Nevertheless, he advocated for the expansion of Chinese manufacturer production capacity in Europe to fortify the continent's position in the ever-evolving electric vehicle sector.
The rapid technological development in China has led to a 40% growth in the market for plug-in hybrids and electric cars during the first quarter. Lamenting over the missed opportunity to foster the home market for electric vehicles in Germany due to indecision, Diess reminisced about his tenure at the helm of the large automaker.
Insights from the Information Vault:
Volkswagen's strategy for battery production in Europe includes the establishment of its dedicated battery division, PowerCo, aiming to build six gigafactories across Europe by 2030. These factories will target a combined annual capacity of 240 GWh and create around 20,000 jobs. Salvator Mundi (Salzgitter), the first of these factories, is set to produce 40 GWh/year by 2025, catering to 500,000 electric vehicles annually [2][4]. PowerCo plans to invest €20 billion in battery production by 2030. Additionally, the Salzgitter facility includes a recycling center to reclaim materials from used batteries, reducing dependency on raw material imports [2].
In terms of localized production and technology leadership, Volkswagen is prioritizing European gigafactories to ensure supply chain security and comply with EU sustainability standards, reducing reliance on non-European suppliers [2][5]. The automaker is also investing heavily in the development of proprietary battery technology through PowerCo to control costs and maintain quality [4]. Furthermore, Project Trinity and the modernization of the Wolfsburg facility focus on next-generation EV platforms with advanced software and production efficiency [5].
While the article doesn't explicitly mention Diess advocating for Chinese partnerships in Europe, Volkswagen's strategy emphasizes localized production and technological independence, with limited mention of cooperations with Chinese manufacturers.
- What about the potential for Chinese manufacturer cooperation in Europe, Herbert Diess, now serving as the chairman of Infineon's supervisory board, shared his thoughts.
- Diess mentioned that the innovation paths of European and Korean manufacturers are being influenced by Chinese battery suppliers due to cost-effective technology in high-speed charging iron phosphate batteries.
- He advocated for the expansion of Chinese manufacturer production capacity in Europe to strengthen the continent's position in the growing electric vehicle sector.
- The rapid technological development in China led to a 40% growth in the market for plug-in hybrids and electric cars during the first quarter.
- Diess lamented over the missed opportunity to foster the home market for electric vehicles in Germany due to indecision during his tenure as Volkswagen's CEO.
- Volkswagen's strategy for battery production in Europe includes the establishment of PowerCo and the building of six gigafactories across Europe by 2030, targeting a combined annual capacity of 240 GWh and creating around 20,000 jobs.
- The automaker is also investing in the development of proprietary battery technology through PowerCo to maintain control over costs and quality, as well as ensuring supply chain security and compliance with EU sustainability standards by prioritizing localized production.
