Volkswagen Group laid out big plans on Monday to pass Tesla and becoming the world's largest maker of electric vehicles.
"Let me begin with the obvious: e-mobility has won the race," VW Group CEO Herbert Diess said at the company's Power Day event. "It is the only solution to reduce mobility emissions fast."
Instead of talking about cars, design, or other customer-facing features, however, most of the event was spent concentrating on the heart of electric cars: the battery.
This is because batteries currently make up more than 30 percent of an EV's cost. And with every automaker looking to pivot to EVs, it's not just about getting batteries at the cheapest price possible but also securing enough supply to meet those ambitions.
The pivot will not be cheap. VW announced it plans to build six battery factories across Europe by 2030, which BloombergNEF estimates would cost about $29 billion.
The automaker is also making investments in unifying the design of its battery and in recycling precious metals.
And yet, VW will find it hard to beat Elon Musk.
"Tesla will likely maintain its broad EV leadership," Ben Kallo, an analyst at Robert W. Baird, wrote in a report. Even after VW's hours-long presentation Baird still sees Tesla as having the upper hand with regard to batteries.
Venkat Viswanathan, an associate professor at Carnegie Mellon University and an EV expert, also thinks Tesla's drivetrains comprising both batteries and electric motors are four or five years ahead of the competition. They offer "the highest driving range for the same battery capacity," he said.
Baird's Kallo gives VW's ambitions high marks -- he is just not convinced Musk will cede pole position. "We view Volkswagen as a potential leader in the 'non-Tesla' portion of the EV market," Kallo wrote. "A non-Tesla EV ecosystem will emerge, similar to the non-Apple ecosystem in smartphones (i.e., Android)."