Last February Daimler CEO Dieter Zetsche ruled out investing in battery-cell production for electrified powertrains because supply was already exceeding demand. "The dumbest thing we could do is to add to that overcapacity," he said.
Less than a year later, Volkswagen Group is signaling the exact opposite concern as it sizes up contenders for one of its biggest contracts in recent history: cell supplier for cars that will be underpinned by its forthcoming MEB electric platform. "The capacity is not there. Nobody has the capacity," Thomas Sedran, VW's head of group strategy, said last month of the six largest global cell suppliers competing for the contract.
Much has changed between the time that those two statements were uttered. Automakers are under increasing pressure to electrify their powertrains to meet toughening global emissions regulations. The big question is whether there will be enough battery cells available in the next decade to meet the fast-rising demand predicted by automakers such as VW Group, Daimler, BMW Group, General Motors and Ford Motor. VW Group is leading the charge. Europe's largest automaker has said it expects to sell between 2 million and 3 million full-electric cars annually by 2025.
VW Group is not alone in its optimism for European, Chinese and – to a lesser extent – North American uptake of EVs. By 2020, Tesla wants 1 million EV sales globally, Nissan in Europe predicts 20 percent of its sales will be EVs and Ford forecasts that EVs will account for 15 percent to 20 percent of the total Chinese market. Moving to 2025, Mercedes predicts that 15 percent to 25 percent of the vehicles it sells globally will be powered by batteries. BMW has said the same but includes plug-in hybrids in its estimate while Ford reckons that by then about a quarter of all vehicles sold globally will get all or some of their power from a plug.