Volkswagen is taking new measures to hold its battery suppliers close, as battery suppliers are reportedly still skeptical of whether consumers will buy electric cars in large numbers—and hesitant to make the large investments necessary.

So VW is partnering with battery suppliers to provide funding to build and expand battery factories.

Board member Stefan Sommer told Reuters, “We have not been able to build as many cars as we wanted to. Our supplier is not delivering the numbers that we need.”

“We have built up our own expertise, which we share with suppliers, which helps when we build a new plant. It gives us an early indication if there are teething problems,” he said.
If the company still doesn’t find enough suppliers for all the batteries it needs, Sommer says it is prepared to build its own battery factories in China.

The automaker is ground zero for a massive push into electric car production, and has plans to purchase $56 billion worth of batteries through 2028 on its way to building 22 million examples of up to 70 new electric models by 2028. That’s far more ambitious—and represents a commitment to acquire far more batteries—than any other automaker in coming years.

The company has said that it will need 150 gigawatt-hours of battery supply in Europe by 2025 and another 150 gigawatt-hours in Asia, to say nothing of North America or the company’s plans beyond 2025.

Yet a couple of supply hiccups have already interrupted the VW Group’s electric-car plans. Last fall, a Belgian newspaper near the factory where VW’s luxury division Audi builds the E-tron quattro, reported that production was delayed over a dispute with battery supplier LG Chem over pricing and supplies.

Then, in May, another battery supplier, Samsung, dramatically cut its supply agreement with VW over disagreements about timing. The dispute could interrupt plans for more than 200,000 electric VWs in Europe.

Volkswagen isn’t the only automaker struggling to secure sufficient supplies of lithium-ion batteries for all the electric cars it plans to build. In May, Tesla’s global supply manager for battery metals, Sarah Maryssael, told a conference of mining executives and Washington lawmakers that the company is preparing for global shortages of battery raw materials.

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