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Volkswagen has big things planned for Monday! The company is celebrating Power Day, which is apparently a day all about batteries. That’s right! Batteries. But while that doesn’t seem that exciting on the surface, it is.

Volkswagen Power Day – March 15, 2021,

According to Reuters, Volkswagen requires 300-gigawatt hours (GWh) in battery cells by the end of 2020 to keep up with demand. This is mostly concerning Volkswagen’s electric vehicle production in Europe.

“Bernstein analyst Arndt Ellinghorst reckons Volkswagen needs 420 GWh worth of battery cells globally by 2030 if it wants to sell 7 million battery electric vehicles, requiring more than 20 billion euros ($23.8 billion) in annual spending.”

Jan Schwartz, Christoph Steitz | Reuters

This is part of the new supply chain update for Volkswagen’s move to have electric vehicle sales make up 70% of sales by 2030. Currently, the brand sources batteries from four different brands, but demand is not very high yet.

By 2025, Volkswagen expects demand to bump up in both Europe and Asia to around 150 GWh by 2025. Since electric vehicle sales are not a huge part of total vehicle sales, VW has time to ramp up production.

The clip above notes it is not a car presentation, but the battery graphics would allow us to assume it is about batteries.

What does this have to do with Tesla?

Volkswagen Group CEO Herbert Diess has been pretty clear that he wants to follow Elon Musk and Tesla’s footsteps. Back in 2020, Diess posted an update on LinkedIn that he wanted to catch up with Tesla. He titled this “Mission T.”

As a result, we had to tailor Volkswagen’s strategy to keep up with these new competitors. To this end, we organized a second workshop with Professor Malik in April 2020. 31 senior executives from Volkswagen, Audi and Porsche were involved in ‘Mission T’, as it was dubbed. The event revolved around how we can catch up with Tesla – a company focused exclusively on the future, without a traditional car business.

Herbert Diess | Volkswagen Group CEO

According to Jalopnik, Tesla had a similar Battery Day on September 22, 2020, when the company announced an upgrade in battery technology. By doing this, Tesla hoped to reduce the price of batteries by 56%. With that, Tesla hopes to be able to offer a car under the price of $30,000.

Prior to this, Tesla sourced batteries from Panasonic. The new batteries will be made in-house, which is part of the huge reduction in price.

In addition to the price reduction, the batteries would be more powerful and get a further range.

Good news for EV production either way

We do know that people have been pitting Tesla’s Model Y against Volkswagen’s ID.4, but that doesn’t mean they are copying Tesla outright. If anything, this is a smart move for both companies.

It sounds like Volkswagen is making big moves in the right direction, and being pretty clear about how the company plans to get there.

You can watch Volkswagen’s Power Day Livestream on the Volkswagen website.


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