Volkswagen CEO sees case for building own battery factory

Europe’s largest carmaker Volkswagen sees building its own factory to make electronic vehicle batteries as a logical move as it expands production of low-emission cars after its emissions scandal.
Volkswagen and its labor unions agreed on Friday to cut 30,000 jobs at the core VW brand in exchange for a commitment to avoid forced redundancies in Germany until 2025.
The cuts came with a management pledge to create 9,000 new jobs in the area of battery production and mobility services at factories in Germany as part of efforts to shift toward electric and self-driving cars.
“If more than a quarter of our cars are to be electronic vehicles in the in the foreseeable future then we are going to need approximately three million batteries a year,” CEO Matthias Mueller told Frankfurter Allgemeine Sonntagszeitung. “Then it makes sense to build our own factory.”

Talks with Uber 
Volkswagen currently relies on external battery suppliers for the electric vehicles it makes.
Mueller said that Volkswagen has been in talks with ride-hailing service Uber on potential cooperation but the carmaker would not settle for the role as a mere supplier.
“They (Uber) saw us more in the role of a supplier. But we said: Okay guys, this is a contest which we are happy to take on. We will remain in command,” Mueller said.
Automakers like VW are developing electric vehicles and billing themselves as mobility companies that don’t merely sell cars but also get involved with alternatives to conventional car ownership such as ride-hailing.
Mueller confirmed that Volkswagen had set aside 18 billion euros ($19.1 billion) to cover the cost of its diesel emissions cheating scandal.
Volkswagen does not expect the German government to make tax demands to cover any revenue losses related to the scandal, a company spokesman said on Saturday. 
After a meeting of its supervisory board, VW said earlier it would steadily reduce capital expenditure in the coming years to 6 percent of automotive sales by 2020 from 6.9 percent last year, and cut development costs to the same level.
“The VW group will refine its focus,” Mueller said in an earlier e-mailed statement. 
“We are investing more selectively and are setting clear priorities.” The statement was short on detail compared with VW’s annual rolling budget updates before the emissions scandal, which included absolute spending targets for products, capacity and even its Chinese joint ventures.

Transparency
In its November 2014 update published before the scandal, VW announced 85.6 billion euros of spending in its automotive operations over a five-year period with the Chinese ventures adding another 22 billion euros.
A VW spokesman said the company was no longer fixated on providing “big numbers” and was instead prioritising quality over quantity.
“Transparency falls by the wayside in times of uncertainty and problems,” said NordLB analyst Frank Schwope who has a “Hold” recommendation on VW shares. 
“That’s a clear sign that things are not going well for a company.”

Source: Arab News