Volkswagen plans to slowly switch the type of battery employed in its electric vehicles, three sources with information of the matter said on Monday, moving away from the technology provided under current agreements with South Korea’s LG Energy Solution and SK Innovation.
Volkswagen intends to use the prismatic type of battery from China’s Contemporary Amperex Technology Co Ltd (CATL), South Korea’s Money Today news reported earlier on Monday unnamed South Korean battery industry sources. The German manufacturer declined to comment. According to Money Today, Volkswagen plans to announce its battery procurement projects at its Power Day event on Monday.
South Korea’s LG Energy Solution and SK Innovation have produced pouch-type batteries for Volkswagen, while CATL and Samsung SDI have fulfilled it with prismatic ones.
LG Energy Solution, a part of LG Chem, said it does not reflect on market speculation, while SK Innovation refused to explain.
“It really depends on how fast Volkswagen manages to switch to prismatic type batteries. Currently, there are not enough prismatic battery supplies, and it would take quite a while for Volkswagen to fully adopt them,” said Han Sang-won, Daishin Securities Analyst.
“One of the reasons that Volkswagen has chosen to switch could be to enhance electric vehicles’ safety, as prismatic batteries are generally considered to have lower energy density than pouch-type batteries, making them relatively safer,” Han added.
Amongst three varieties of batteries – prismatic, pouch, and cylindrical – prismatic batteries had a 49 per cent share in the EV battery market in 2020, while pouch-type batteries had 28 per cent, according to industry tracker SNE Research.
The plan arrives when LG Energy Solution and SK Innovation are locked in a legal contest in the United States over accusations of misappropriation of trade secrets associated with EV battery technology.