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VW to make big electric-car commitment. Is a battery factory also in the works?

Volkswagen is targeting sales of 1 million electric cars within 10 years. To supply battery cells for all of those cars, the German media is reporting that Volkswagen may build a battery factory.

Hannibal Hanschke/Reuters/File
A Volkswagen logo is pictured at Volkswagen's headquarters in Wolfsburg, Germany (April 22, 2016).

Volkswagen is reportedly considering building its own battery factory as part of a large commitment to electric cars.

The company is targeting sales of 1 million electric cars within 10 years.

That likely includes sales from the main VW brand as well as other Volkswagen Group brands like Audi and Porsche.

To supply battery cells for all of those cars, Volkswagen may build a battery factory, according to German business newspaper Handelsblatt.

VW's non-executive supervisory board will reportedly consider the plan before the company's annual meeting June 22.

The battery factory already has apparent support from Volkswagen's works council and the German state of Lower Saxony, its largest shareholder.

Lower Saxony would also be the likely location for the battery factory, which could cost 10 billion euros ($11.2 billion), according to Deutsche Welle.

To reach its 1-million-unit goal, VW will likely rely heavily on the MEB platform for compact electric cars announced last year.

The company has also announced an electric version of the next Volkswagen Phaeton luxury sedan, as well as production versions of the Audi e-Tron Quattro SUV and Porsche Mission E sedan concepts.

These luxury models will likely sell in somewhat low volumes, however.

In addition to supplying larger volumes of electric cars, the goal of the battery factory would reportedly be to help VW operate independently of suppliers like Panasonic, Samsung, and LG Chem.

The two South Korean firms are already committed to supplying battery cells for the Audi electric SUV, which is due in 2018.

Tesla is working closely with Panasonic on its massive battery "gigafactory" in Nevada, with the Japanese company contributing technical knowledge and funds.

General Motors engaged in a far-reaching partnership with LG in which the Korean company developed numerous components for the Detroit firm's Chevrolet Bolt EV electric car.

Other companies find no issue with buying battery cells from suppliers.

Daimler recently announced plans to triple production capacity for battery packs at its Deutsche Accumotive battery subsidiary.

The company will spend 500 million ($550 million) on a second battery plant, which will produce packs with cells manufactured by South Korean suppliers.

Daimler shut down its cell subsidiary Li-Tec last year, saying it simply wasn't economical to make cells itself in Germany.

This article first appeared at GreenCarReports.

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