VW’s 1.22 billion euro battery deal with Wanxiang A123


According to so far unconfirmed information from China, Volkswagen has chosen Wanxiang A123 as another battery cell supplier for its electric cars. Apparently, Volkswagen plans to purchase at least ten billion yuan (1.22 billion euros) worth of batteries.

According to unnamed industry insiders cited in Chinese media, Wanxiang is said to have confirmed that Volkswagen has placed an order with its subsidiary A123. No mention was made of the time frame for the delivery of the batteries.

According to the US news site InsideEVs Wanxiang is now said to have confirmed the agreement between VW and A123. Volkswagen has not yet confirmed the deal, but this week one of the original founders of A123, Ric Fulop, tweeted that Wanxiang A123 is going to supply around $1.4 billion worth of batteries for Volkswagen’s electric car models in China with reference to the InsideEVs article, while Chinese web media researcher DKurac tweeted the deal with reference to Chinese media.

The battery cell manufacturer Wanxiang A123 began as a US company called A123 Systems, which went into insolvency in 2012 before Wanxiang took it over. If the deal with Volkswagen is confirmed, it is still not clear which cell types will be involved. According to InsideEVs A123 Systems was known for its LFP cells called “Nano Phosphate”. It remains to be seen whether Wanxiang A123 will also supply LFP cells or whether it is now using different cell chemistry. Back in 2018, A123 Systems announced their investment in Ionic Materials, a startup working on a polymer for solid-state batteries, around the same time A123 Systems found a trustee in the Renault-Nissan-Mitsubishi Alliance.

A few weeks ago Volkswagen announced that it would invest around one billion euros in a stake in Chinese battery manufacturer Gotion High-Tech alias Guoxuan and become the company’s largest shareholder with 26 per cent. This means that Volkswagen will also be sourcing battery cells from Gotion and apparently now also Wanxiang A123, as well as its longer-standing partner in China, CATL. This would follow Volkswagen’s approach of diversification in battery supply. In Europe, the carmaking giant uses LG Chem, Samsung SDI, SK Innovation and CATL as well as relying on the joint venture gigafactory with Northvolt, but in North America Volkswagen currently relies on solely on SK Innovation.,


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