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Business

VW to expand production in electric car offensive

Automaker signs $25bn contracts with Chinese and South Korean battery makers

Volkswagen CEO Matthias Mueller speaks at the annual earnings news conference of VW in Berlin in Berlin, Germany, March 13, 2018.   © Reuters

BERLIN -- Volkswagen will expand electric vehicle production to 16 plants and widen partnerships with battery makers as the German automaker seeks to hit its sales target of 3 million electric cars a year by 2025.

VW currently has three electric vehicle factories, but that number will increase to nine by 2020 and to at least 16 by 2022, the automaker said Tuesday. It will add facilities in countries like the Czech Republic and Poland to complement existing plants in Germany and Slovakia. It will also set up five production sites in China -- the world's largest auto market -- by 2022 and will begin production in the U.S. state of Tennessee as well.

The automaker said it awarded lithium-ion battery contracts worth about 20 billion euros ($24.8 billion) to South Korean and Chinese companies. CEO Matthias Muller named LG Chem, Samsung SDI and China's Contemporary Amperex Technology as suppliers. The German manufacturer said it will decide on a North American supplier soon.

Volkswagen is also developing its own next-generation lithium-ion battery for release after 2021. It aims to improve energy storage capacity and mileage while reducing the use of cobalt, an increasingly expensive rare metal.

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