Volkswagen and GM are leading the battery war. Can they stop Tesla?

Traditional car companies have begun competing in batteries.

On March 15, although I didn’t see Tesla on CCTV, I saw Tesla’s rival, Volkswagen, at an online press conference.

From the name "Power Day" which is very similar to "Battery Day" to Volkswagen's announcement of its latest battery strategy, the two companies' battery routes cannot be said to be exactly the same, but at least they are very consistent.

In March of a year ago, General Motors first unveiled its Ultium battery plan. Just a few days ago, the American automaker signed an agreement with MIT to begin developing the next generation of battery technology, with costs set to drop by another 60%.

As we all know, batteries are the most important link for the popularization of electric vehicles. They are related to the improvement of battery life and charging speed as well as the reduction of costs.

The reason why Tesla has been so strong and has almost no rivals in recent years is largely due to its huge technological and cost advantages in the battery business.

According to a research report recently released by market research firm Cairn Energy Research Consulting, Tesla's advantage in lithium battery costs can last for another ten years. However, judging by the strong offensive from GM and Volkswagen, Tesla's glory may not last that long.

Volkswagen's battery route

The first thing that Volkswagen Group unveiled at yesterday's "Power Day" was the unified cell that is embedded with intelligent technology. For Volkswagen, which excels in modularization and platformization, the standard cell is very much in line with its style.

Currently, all electric vehicles under the Volkswagen Group have their own battery cell structure. Starting from 2023, 80% of the group's electric vehicles will use unified standard battery cells, and the remaining 20% ​​of high-performance or customized models will adopt non-modular battery cell solutions.

In the future, Volkswagen will integrate the battery cells directly into the chassis of the vehicle body, and further reduce costs and increase efficiency through this modular approach. Overall, the cost of Volkswagen's future entry-level electric vehicles can be reduced by 50%, and the cost of mainstream models can be reduced by 30%.

In terms of battery materials, Volkswagen Group has deployed lithium iron phosphate batteries, high manganese ternary lithium batteries, nickel cobalt manganese ternary batteries and solid-state batteries. Among them, lithium iron phosphate is for entry-level models, and high manganese ternary lithium batteries are for mainstream models.

Of course, the ultimate direction is still solid-state batteries. In the future, the battery life will be increased by 30% and the charging time will be shortened by 50%. By 2025, a Volkswagen pure electric vehicle will only take 12 minutes to fast charge from 10% to 80%.

In order to significantly reduce battery costs, it is also necessary to have the ability to recycle and reuse battery raw materials. Volkswagen Group opened its first battery recycling plant in January this year. Its long-term goal in the future is to recycle 95% of precious metal raw materials.

With this series of measures, Volkswagen Group will be able to reduce battery system costs to below 100 euros/kWh.

After taking a look around, does it look familiar to you? Whether it is the choice of battery materials, the new architecture for direct module integration, or the recycling of raw materials, they are actually very consistent with the technical route announced by Tesla on "Battery Day" last year.

In terms of the choice of self-research or procurement, the two companies are also in step, insisting on the two-pronged approach of procurement and self-production. They not only have supplier partners such as CATL and LG Chem, but also have invested in or acquired some battery start-ups to establish their own battery production systems.

Moreover, both Tesla and Volkswagen firmly believe that the ultimate direction of electric vehicle batteries is not the so-called hydrogen fuel cells, but solid-state batteries.

GM's battery roadmap

Let’s take a look at General Motors. This traditional car company, which aims to fully electrify its vehicles by 2035, is planning its battery business.

Last March, General Motors demonstrated its Ultium proprietary battery and third-generation electric vehicle platform, and announced the establishment of a joint venture with LG Chem to jointly develop and produce battery cells to reduce battery costs to less than $100/kWh.

Not long ago, General Motors established a joint venture with Singapore Solid State Energy Systems (SES) to make preliminary technical preparations for the research and development and mass production of the next-generation Ultium batteries.

SES mainly researches lithium metal battery technology, which is to replace the traditional graphite negative electrode with ultra-thin lithium metal to achieve smaller size and longer battery life.

Therefore, General Motors is also integrating the upstream industrial chain through joint ventures. If there is any difference in the path chosen between it and Volkswagen and Tesla, it is that GM has also bet on hydrogen fuel cell technology, which is the "IQ tax" technology that Musk calls useless.

Both Volkswagen and General Motors hope to firmly grasp the dominance of the battery business in their own hands by mastering the core capabilities of independent research and development and production and manufacturing. This is also the direction that Tesla has always adhered to.

Currently, if we only look at the cost of lithium batteries, Tesla still has the lowest cost in the industry. After all, it has the highest production of pure electric vehicles and has an advantage in purchasing. The average purchase price is only US$142/kWh. In comparison, General Motors is US$169/kWh, and the industry average purchase price is US$186/kWh.

However, as traditional automakers such as Volkswagen and General Motors are making efforts, battery costs will drop significantly. Below $100/kWh is no longer a dream. Tesla even said that it will drop to $50-55/kWh in the future.

No matter who ultimately takes the lead in this battery war, it is good news for consumers, because it means that the price of electric vehicles will not only be comparable to that of fuel vehicles, but may even be lower than that of fuel vehicles. This is the moment when electric vehicles will truly become popular.