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CTOnews.com, March 17 (Reuters)-Volkswagen plans to invest in the mining industry to reduce the cost of battery units, meet half of its needs and sell to third-party customers, Thomas Schmall, a board member in charge of technology at Volkswagen, said in an interview.

Thomas Schmall said that as Europe's largest carmaker, Volkswagen wants its battery division, PowerCo, to become a global battery supplier, not just producing batteries for its own needs. PowerCo will first supply battery units to Ford, which will produce 1.2 million cars in Europe based on Volkswagen's electric MEB platform.

In the long run, Volkswagen plans to build enough batteries to meet half of its global battery needs, with most of its capacity in Europe and North America, Schmall said. "the bottleneck in raw materials is mining capacity-which is why we need to invest directly in mining," he said. "

The carmaker is signing a supply agreement with Canadian mining companies to build its first battery plant in North America.

Schmall declined to comment on other locations under consideration, or where or when Volkswagen might invest directly in the mine, saying the company would not disclose such information until the market was more stable. "there will be a few battery standards in the future," he said. "through our huge scale and third-party sales business, we hope to be one of these standards."

Making or purchasing batteries at a reasonable cost is a key challenge for carmakers such as Volkswagen, Tesla and Strandis, which are looking to make electric cars affordable.

According to Reuters, only Tesla has promised to invest more in battery production than Volkswagen. However, few carmakers have disclosed direct stakes in the mining industry, but many have reached agreements with manufacturers to purchase materials such as lithium, nickel and cobalt and transfer them to their battery suppliers.

PowerCo was founded last year and aims to achieve annual sales of 20 billion euros (CTOnews.com Note: currently about 146.4 billion yuan) by 2030. This is an ambitious road map for a sector that has not yet been mass-produced. Production of the PowerCo will begin in 2025 at a plant in Salzgit, Germany, in 2026 in Valencia, Spain, and in 2027 in Ontario, Canada.

Nonetheless, Schmall is confident that the carmaker will be able to expand rapidly, which it must do if it is to build a reasonably priced electric car, 40 per cent of which comes from batteries.

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