German automaker Volkswagen AG said it will produce electric vehicles at 16 factories by the end of 2022, compared with three currently, having secured €20 billion in battery supplies for its push into electric cars.
Volkswagen struck deals with Samsung SDI Co. Ltd., LG Chem Ltd. and China-based Contemporary Amperex Technology Co. Ltd. to supply batteries in Europe and China, Bloomberg News reported. All in all, Volkswagen plans to purchase batteries worth €50 billion, including for the North American market.
The plan is to build as many as 3 million of the cars a year by 2025.
The company plans to roll out three new electric vehicle models in 2018, with a new battery-powered model "virtually every month" beginning 2019, CEO Matthias Müller said at the company's annual press conference. "This is how we intend to offer the largest fleet of electric vehicles in the world," he said.
Tesla had $17.5 billion worth of electric-car purchase obligations as of 2017, including $15.4 billion in deals through 2022, according to the report.
Volkswagen, which billed the battery tender as the biggest in the history of the automotive industry, has struggled to secure sources of cobalt, which is used in modern batteries, but the company has enough cobalt for those vehicles, although access to the metal remains an industrywide issue, CFO Frank Witter told Bloomberg TV.
Meanwhile, Volkswagen expects group sales to be up to 5% above the previous year's level and an operating margin of between 6.5% and 7.5% of revenue in 2018, compared with 7.4% in 2017.
