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VW May Pick China for first EV Battery Plant

China may be the first country where Volkswagen Group could invest billions in one or more plants to manufacture electric-vehicle batteries, a source close to senior management said, citing the Chinese government’s determined support for EVs.

The German automaker anticipates it will sell 2 million to 3 million battery-electric cars and plug-in hybrids a year at that point, after previously forecasting annual sales of 1 million units.

The current global automotive cell capacity is estimated at around 27 gigawatt hours of supply for the entire industry, VW believes it alone will need the equivalent of 150 GWh just to power its own fleet.  That is roughly 10 battery plants, each requiring investments of 2 billion euros (15 billion yuan).

China offers another major advantage. If one or both of Volkswagen’s Chinese partners builds a plant for battery cells and packs, VW would only have to finance half the funds, with the other half coming from Shanghai Automotive Industry Corp. or China FAW Group Corp.

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