Volkswagen takes aim at Tesla with own European giga factories

FRANKFURT: Volkswagen plans to build half a dozen battery cell plants in Europe and expand infrastructure for charging electric vehicles globally, accelerating efforts to overtake Tesla and speed up mass adoption of battery-powered cars.

The world's No. 2 carmaker, which is in the midst of a major shift towards battery-powered cars, said on Monday it wants to have six battery cell factories operating in Europe by 2030, which it will build alone or with partners.

"Our transformation will be fast, it will be unprecedented," Chief Executive Herbert Diess told Volkswagen's Power Day, which also featured the CEOs of BP, Enel and Iberdrola in an effort to match some of the buzz of Tesla's Battery Day last September.

"E-mobility has become core business for us," he added.

Volkswagen, whose shares rose as much as 3.8%, did not specifically say how much the plan will cost. It said in December that it planned to spend 35 billion euros ($41.7 billion) on e-mobility as a whole by 2025.

The group had been a laggard on electrification until it admitted in 2015 to cheating on US diesel emissions tests and had to deal with new Chinese quotas for electric vehicles. It now has one of the most ambitious programmes in the industry.

Volkswagen said the European factories will have a joint production capacity of up to 240 gigawatt hours (GWh) a year, adding the first 40 GWh would come from Sweden's Northvolt, with production starting in 2023.

As part of the deal, Volkswagen will raise its 20% stake in Northvolt and also take over the Swedish firm's stake in a planned battery cell venture in the German city of Salzgitter, which will form the second factory from 2025.

This will be followed by a factory in Spain, France or Portugal in 2026 and a site in Poland, Slovakia or the Czech Republic by 2027. Two more plants will be set up by 2030.

While the first two factories are already reflected in Volkswagen's financial planning, the group is currently in "deep discussions" about how the subsequent plants fitted with financial targets, board member Thomas Schmall said.