VW will lean on battery suppliers to power electrification blitz

BERLIN — Armed with a product plan stacked with full-electric and hybrid vehicles, Volkswagen Group will rely on battery suppliers with greater expertise, CEO Matthias Mueller said.

Mueller, speaking at the the automaker's annual press conference here on Tuesday, also said VW's U.S. plant in Chattanooga could begin making electrified vehicles in 2022, but the company is taking a "wait and see" approach with ongoing trade negotiations before making any concrete decisions.

While the 11-brand conglomerate has global plans for 80 new electrified vehicles by 2025, including 50 full electrics, it will stay out of the battery manufacturing business.

"Building up expertise and mastering the technology does not necessarily imply that we want to start large-scale manufacturing of batteries ourselves," Mueller said. "This is not one of our core competencies, and others can do it better than we can."

Mueller said that the outsourcing of battery production includes the company's plans in North America, where a battery supplier decision is "imminent." The Volkswagen brand plans to sell four full-electric vehicles in the U.S., beginning in 2020 with the I.D. Crozz crossover, followed in 2022 with the I.D. Buzz, a throwback design to the Volkswagen Microbus.

EV manufacturing

Beyond the potential to build EVs in Chattanooga in 2022, VW could begin assembling other electric vehicles in Germany and elsewhere in Europe, as well as in China.

Beyond the potential to build EVs in Chattanooga in 2022, VW could begin assembling other electric vehicles in Germany and elsewhere in Europe, as well as in China.

Mueller said Volkswagen's global plans for electric vehicles will require battery capacity of 150 gigawatt-hours per year by 2025 for its vehicles. By 2030, the CEO said, the automaker's entire global portfolio of 300 vehicles would be electrified to some degree. He said that beginning next year, the company's 11 brands would collectively be introducing one new electric vehicle every month.

Speaking in Berlin — away from the company's corporate home in Wolfsburg, Germany — Mueller said that Volkswagen wasn't giving up on either the internal combustion engine or diesel, both of which can be further improved.

"We are investing a great deal of money and effort in making further significant reductions in [fuel] consumption and emissions," Mueller said. "So I can only hope that the diesel engine hasn't been talked to death by then, because the modern diesel is part of the solution, and not part of the problem."

Watching tariffs, NAFTA

During questioning from reporters, Mueller and Volkswagen Group CFO Frank Witter said the company is watching closely the ongoing renegotiation of NAFTA as well as the implementation of tariffs on steel and aluminum by the Trump administration.

"In our industry, there are hardly any rapid advancements that can be made," Witter said through a translator, appealing to all parties to remain "level-headed" and continue talking to one another. "It's important to maintain dialog and not set off a race to the bottom, because there would be only losers there."

In terms of the unresolved legal fallout of VW's the 2015 diesel emissions cheating crisis, Mueller said about 80 percent of offending group diesel vehicles globally had either been fixed or taken off the road.

He said prosecutors and investigators in Germany "have taken more time than is desirable" to conclude their investigations. German authorities have continued to raid VW executive offices in recent months in search of additional evidence. Homes of current and former Audi employees were raided in January.

Mueller added: "All we can do is to be patient and wait. We have cooperated with authorities, and we will continue to do that."