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VW announces $84B investment in electric cars and batteries
- Invictus0 9y agoThe push towards electric cars is an ostensible step in the right direction from an environmental standpoint, but most commentators fail to consider the massive quantities of hazardous toxic waste produced as a byproduct of neodymium mining. http://www.bbc.com/future/story/20150402-the-worst-place-on-earth http://www.bbc.com/future/story/20150402-the-worst-place-on-... https://www.theguardian.com/environment/2012/aug/07/china-rare-earth-village-pollution https://www.theguardian.com/environment/2012/aug/07/china-ra... http://e360.yale.edu/features/boom_in_mining_rare_earths_poses_mounting_toxic_risks http://e360.yale.edu/features/boom_in_mining_rare_earths_pos...
- Brakenshire 9y agoRare Earth mining can be done safely, it's just China doesn't want to do so. Ultimately the world has to solve global problems, local or national problems have to be left up to individual countries to sort out.
- stingraycharles 9y agoWhat if they decide to dump the toxic waste into the ocean ? Aren't we then pretty much back to square one ?
- Brakenshire 9y agoYes, that would be a problem if it was happening. But that is regulated by international agreements, and as far as I know, China is not doing it.
- johnchristopher 9y agoWasn't there a slogan that went like this: local solutions for a global problem ?
- babuskov 9y agoThink globally, act locally.
- carlmr 9y agoSo one question, if China is defacto the sole supplier of rare earths and they don't keep up your standards, will this still be a green revolution?
- Brakenshire 9y agoChina is ultimately a global superpower, and its government clearly has wide public support domestically. My hope that I can alter how mining is regulated in China is pretty much nil, that has to be up to the Chinese population to reject their government, to force them into action, or to acquiesce.
- rawfan 9y agoThe only rare earths mine in the US was shut down because of environmental problems. After that no owner was profitable producing REE because of environmental standards to keep up. That was until 2007 when China restricted REE exports. Now that China exports again, the current owner is broke once again (maybe it's already sold, I'm not sure). While other industries can/could successfully be pressured to move to sustainable, fair and environmentally conscious production, the Chinese REE production, as a monopoly, just doesn't care.
- Brakenshire 9y agoYes, it's a problem from our end. I would support some policy mechanisms to support mining in a way which was environmentally sound and reliable.
- AmVess 9y agoIt's not a step in any direction. You still need to burn fossil fuels to mine the materials needed to produce electric cars, and you still need to burn fossil fuels to manufacture and transport them from point of manufacture to sales. Not to mention, you also need to burn fossil fuels to charge them, at least primarily. It's also worthy of noting that even if we remove all automobiles from the planet, it will do exactly nothing for reducing global warming. All electric cars do is trade one form of pollution for another, and isn't really anything more than a bandaid solution for a gaping chest wound. Indeed, green is the new brown.
- cycrutchfield 9y agoSorry, unless you back this up with data (that is, numbers), why should anybody believe your assertions?
- notyourwork 9y agoHere is something that can support OPs claim. Car's are still manufactured with oil, all the plastic, the paint, the tires that comprise the vehicle are dependent on oil. A car requires a lot more oil to produce than people understand so until focus on materials is shifted the car production alone is still a problem.
- brailsafe 9y agoTotally valid. It doesn't mean that until that problem is solved we shouldn't solve problems. I'd compare it to an anti gun-control argument I've heard. Roughly it's that some people who want guns enough will be able to get them, so gun control is useless because we can't stop all gun deaths at once. Which if flipped, is sort of saying that having less guns cheaply and easily available with more regulation is a bad thing.
- afarrell 9y agoAside from the risk of a spill, What is wrong with using oil to produce plastic?
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- tristanj 9y agoNearly all [Edit: not all, see replies] electric cars use induction motors, not permanent magnet motors. Induction motors only need steel, iron, and copper so they don't contain any neodymium.
- stedalus 9y agoTesla is the only major manufacturer using induction motors that I know of. Everyone else is using synchronous motors with permanent magnets.
- carlmr 9y agoTesla is precisely doing it to decrease dependence on China. The synchronous motor is far superior technology efficiency wise. But Tesla is going for stable supply chains as far as possible (which is smart). Synchronous as well as Asynchronous (no magnet) motors are both very durable. We're talking hundreds of thousands, if not a million hours of operation (according to Tesla that's 60,000,000 miles at 60mph). If we don't throw away the motors with every car purchase (which is a big if in today's world of yearly disposable smartphones). Then even a small efficiency advantage should be immensely useful over the life of the motor. IIRC we're talking about 10% more efficiency for synchronous. If you drive it for 1,000,000h and use about 20kW in average operation, that is 20,000,000kWh. 10% would be 2,000,000kWh. That's significant. NYC has a peak demand of 14,500MW (see here: http://blogs.ei.columbia.edu/2015/09/28/how-much-energy-does-nyc-waste/ http://blogs.ei.columbia.edu/2015/09/28/how-much-energy-does...). So you could power NYC for 8mins at it's peak usage with these lifetime efficiency savings(again it's unrealistic that the motors will actually run that long in cars, but at least the rare earths could be easily recouped when recycled properly). So the motor is one of the places where an initial investment in rare earths, could be paid off easily over the lifetime of the motor. Assuming that motors aren't disposed of. The batteries still require massive amounts of rare-earths though, and they don't have the same durability. I see much more of an environmental disaster coming here.
- TaylorAlexander 9y agoThe Tesla Model 3 motor uses permanent magnets unlike the S and X. Another commenter claims rare earths are not needed in battery production.
- TsomArp 9y agoWhy so many cars? 300!
- King-Aaron 9y agoRemembering, the Volkswagen group compromises of several manufacturing brands: Audi, Lamborghini, Bentley, Bugatti, Porsche, Ducati, MAN, Scania, SEAT, Skoda, VW cars.. Which makes that '300 models' seem more likely
- deleted 9y ago[deleted]
- Cthulhu_ 9y agoPlus for every main model they have half a dozen variations (at least), I wonder if those are added to that count.
- simonh 9y agoAlso a lot of those cars under different badges share a huge array of common parts. Take a look at the Seat Alhambra[0] and Vokswagen Sharan[1]. They're practically identical. Really only the radiator grills and lights clusters are varied to suit the brand identity. Some of the town cars are basically the same vehicle tweaked across 3 or 4 badges. [0]http://www.carbuyer.co.uk/reviews/seat/alhambra/mpv/review http://www.carbuyer.co.uk/reviews/seat/alhambra/mpv/review [1]http://www.carbuyer.co.uk/reviews/volkswagen/sharan/mpv/review http://www.carbuyer.co.uk/reviews/volkswagen/sharan/mpv/revi...
- TeMPOraL 9y agoThe article literally says "300 electric vehicle models".
- dsfyu404ed 9y ago300 models could be a van/pickup platform with some creative accounting. 3 cab configurations, 3 bed lengths, 5 trims and 2 powertrain options ups that to 90. Apply all 90 variations to the 1/2, 3/4 and 1-ton variants and you've got 270.
- yaegers 9y agoI get nightmares thinking what that will do to electricitry prices. The graph of how they rose is already awful. And now imagine if the tax collected on mineral oil for gas falls away cause everyone drives electric. And know that there isn't a specific car electricity to tax. Thinking the government would just eat this loss without thinking of ways to make the people pay would just be naive.
- PhantomGremlin 9y agoI get nightmares thinking what that will do to electricitry prices. What about supply? Where does all the electricity to charge the cars come from? Is there enough surplus generating capacity in the system to support millions of EVs?
- yaegers 9y agoYup, that's the other thing. Obviously, the greens don't want nuclear power but so far, the renewable energy can't satisfy the current demand. Let alone an incresed one because of EV's.
- TaylorAlexander 9y agoScarce electricity would raise prices, making solar more economical to install.
- singularity2001 9y agoIs it naïve to hope that solar will reach cost-parity just-in-time?
- j7ake 9y agoEven if solar were same price as "dirty" energy what would be the rate at which you build solar to keep up with the increasing demand of energy ?
- deleted 9y ago[deleted]
- captaintacos 9y agoI guess this announcement from VW got fast-tracked now that China is about to announce a ban on gas-powered vehicles China, in turn probably wants to go forward with that not for environmental reasons, but because they have a near monopoly on the world's supply of rare earths (which the electric vehicle's batteries require)
- chrisb 9y agoThis is factually wrong; rare earth elements are not required for batteries. Rare earth elements are cerium (Ce), dysprosium (Dy), erbium (Er), europium (Eu), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), promethium (Pm), samarium (Sm), scandium (Sc), terbium (Tb), thulium (Tm), ytterbium (Yb) and yttrium (Y) (https://en.wikipedia.org/wiki/Rare-earth_element https://en.wikipedia.org/wiki/Rare-earth_element) Lithium batteries generally require elements such as: Lithium, graphite (carbon), Nickel, Cobalt, Manganese, Aluminium, Oxygen. None of these are rare earth minerals, and production of most of these elements is not concentrated in China. See https://electrek.co/2016/11/01/breakdown-raw-materials-tesla-batteries-possible-bottleneck/ https://electrek.co/2016/11/01/breakdown-raw-materials-tesla... The powerful permanent magnets used in some EVs do require rare earth elements (e.g. neodymium), but many EV motors don't require permanent magnets at all. E.g. Tesla uses an induction motor (no permanent magnet required); whereas the Nissan Leaf does use permanent magnets (assuming https://en.wikipedia.org/wiki/Electric_vehicle#Electric_motor https://en.wikipedia.org/wiki/Electric_vehicle#Electric_moto... is correct).
- rawfan 9y agoMost of the Cobalt reserves are concentrated in Kongo, though.
- igravious 9y agoThere are two Congos. These are in the Democratic Republic of Congo(-Kinshasa), not the Republic of Congo(-Brazzaville), yes? https://www.statista.com/statistics/264930/global-cobalt-reserves/ https://www.statista.com/statistics/264930/global-cobalt-res... The Congo appears to have as much reserves as the rest of the world combined! If demand goes up prospecting will go up.
- singularity2001 9y agoHow much debt do they have to take to make such an investment?
- TomK32 9y agoI'm useless at reading these reports but I guess they have the liquidity: http://annualreport2016.volkswagenag.com/consolidated-financial-statements/cash-flow-statement.html http://annualreport2016.volkswagenag.com/consolidated-financ... Maybe they'll shut/slim down the combustion departments.
- foepys 9y agoMost likely not so much. They wont invest $84B in one year but rather over the next 5 or even 10 years. VW's annual R&D budget is about $14B and considering that ICE are going EoL, this should fall right within the means of normal R&D.
- bischofs 9y agoI think people are confused at how much money big conglomerates like VW and Toyota spend on power train development -- i.e. VW Group revenue yearly is around 250 Billion US dollars. In the entire group power train and vehicle development is budgeted at around 120 Billion a year, so this is just over half of that budget spread out over probably 5 years. These are not SV startups, they are enormous companies by revenue and investment (which is why they have low profits and aren't sexy to invest in )
- ghaff 9y agoVW spends a lot on R&D but it's not 50% of revenue. More like around $14 billion.
- bischofs 9y agoMany development tasks are not lumped in with "R&D", for instance an existing power train that is getting a new Fuel injection system or a transmission getting durability testing are only development. Fixed original post wording...
- mbloom1915 9y agoDon't forget VW has to build EV infrastructure worth billions in U.S. as part of their false emissions settlement. Makes a lot of sense to capitalize on all the new chargers you build with the car offering...
- ramshanker 9y agoVW announces "XY" $. Compare this with Tesla's style, "Starting next week."
- _Codemonkeyism 9y agoYes I still remember the "Starting Model 3 production next week" in 2014 ... no, wait ... https://twitter.com/TeslaMotors/statuses/489200343062814720 https://twitter.com/TeslaMotors/statuses/489200343062814720 Ah no it was the Gigafactory they started ... no, wait again, this was also announced years before building started. Hmm, you've got me confused.
- rockinghigh 9y agoThat's actually the point. Tesla gets customers excited about their next product. Volkswagen makes financial announcements to please investors and regulators.
- kolbe 9y agoLOL. Their market cap isn't even that high.
- bischofs 9y agoThey pull in $250 Billion a year and have almost half a trillion in assets, I think they can manage... https://en.wikipedia.org/wiki/Volkswagen_Group https://en.wikipedia.org/wiki/Volkswagen_Group
- kolbe 9y agoOnly in the SV bubble does $5b in profit on $250b in revenue constitute "pulling in." And if you believe their accounting, then they're trading way under their book value. If they issued bonds to finance $84b in electric car research, they'd be rated thoroughly junk.
- Retric 9y agoLeverage is a thing... However, they spend a lot of money on R&D and this is just part of that budget over several years.
- kolbe 9y agoI see $3-4b in R+D per year
- Retric 9y agohttp://annualreport2016.volkswagenag.com/group-management-report/sustainable-value-enhancement/research-and-development/key-r-d-figures.html http://annualreport2016.volkswagenag.com/group-management-re... Total research and development costs 2016 : 13.672B, 2015 : 13.612B Split over a ~12 years that's a little over 1/2 of total R&D spending. However, much of this is capital expenditures on new battery manufacturing not just pure R&D.
- ams6110 9y agoSo pretty much every major automaker is saying that in the next 5 - 10 years they will either be fully electric or significantly so. I don't see that ending well for Tesla or at least for their business line of making cars. Full credit to them for showing what an electric car can be (i.e., something more than a golf cart), but they also have awakened the mainstream automaker giants, who can completely dominate them in dealerships, manufacturing capacity, and worldwide presence.
- deleted 9y ago[deleted]
- wil421 9y agoI think Tesla is the only one going with a fully electric lineup. The others are complementing ICE models with a fully electric option. Which I think is the best move. I really hated the first Hybrids and electrics from the incumbent automakers. They always looked so different. Always felt if they look the same as the current lineup people would buy more, it happened already with hybrid options.
- briffle 9y agoBy making the cars different, they can make them better fitted for electric cars. IE, Teslas put their batteries in the bottom frame. Will VW put them in the trunk and engine bay? how will that change the driving characteristics with the weight changes from the gas model. Will all wheel wells become larger, to handle electric motors for some of the options?
- wil421 9y agoThe German car companies are usually great at weight distribution, BMWs are almost all 50/50. Mercedes are pretty close to that, not familiar with VW models. I'd worry more about the battery capacity than where to put it. I'd argue it's a harder engineering challenge to distribute weight in an ICE than an EV.
- joshvm 9y ago
- princeb 9y agoThis and the other MB announcement come at interesting times. Both these companies are slightly on the back foot in Germany. BMW supposedly took the strategic route of redirecting investment into electric a while back. they already have the i3 and the i8 (which, depending on how you look at it, could be the most beautiful or the most ugly car in the world) and in a few months the X7 hybrid SUV. VW has Golf and Passat hybrids, whereas MB just discontinued their B series leaving them with no electrics at all. BMW had nothing to show for the last few years going up against MB's latest line-up refresh and the poor sales over the last few years reflects how dated-looking BMWs have been. I'm thinking BMW has another ICE refresh to go before they too go fully electric/hybrid, and it might happen sooner rather than later. Tesla is probably an important competitor but at the moment I'm more likely to believe BMW, Audi and MB could pull off a production capacity of a million+ hybrids per year each by 2020 if they put themselves to it. * I wrote a similar comment in the MB submission.
- mtmail 9y agoThe i8 are hybrids with two engines. BMW sold an e-Mini 2009 https://en.wikipedia.org/wiki/Mini_E https://en.wikipedia.org/wiki/Mini_E and announced to release the next version 2019 http://www.businessinsider.de/bmw-electric-mini-concept-frankfurt-motor-show-2017-8?op=1&r=US&IR=T http://www.businessinsider.de/bmw-electric-mini-concept-fran... edit: corrected what I said about the i3, there are full electric versions
- devy 9y agoi3 not only has the hybrid trim (called REx, range extender with a motorcycle engine to recharge), but also has a BEV (battery EV, 100% electric) trim. I owned one of the i3 BEV for 2 years. And yes, the 2009 Mini-E (based on a modified Mini Cooper) was a limited production trial, as well as the 2011 BMW ActiveE (based on a modified 1-series). Both were predecessors of BMW i3.
- spectrum1234 9y agoThe most ugly. These are literally the ugliest things I have ever seen. I have no idea what BMW is thinking. And I used to own a 330i. disclaimer, I have eyes
- ckastner 9y agoFinally, the EV battle is getting exciting! I'm very curious who will win the race to the middle, that is mass EV production: either (1) Tesla becoming a mainstream car manufacturer, or (2) the mainstream car manufacturers learning to do EVs. I'm inclined to favor the Big Auto. I believe they can easily catch up with Tesla's EV technology, whereas Tesla will have a hard time ramping up production to Big Auto scale.
- cJ0th 9y agoI could imagine that this isn't just about manufacturing but also emotions. That is, do people want an "exciting" new brand or will owning an Audi, BMW, Mercedes ... stay a status symbol?
- lttlrck 9y agoBig auto has been doing badge engineering for a very long time, they’re already experts at playing with your emotions.
- cJ0th 9y agoThat's true. In the past, however, they never had to deal with a new competitor as "cool" as Tesla.
- WorldMaker 9y agoPerhaps Shelby Motors or DeLorean Motor Company would have a word on that subject?
- devy 9y ago> I'm inclined to favor the Big Auto I tend to agree with you due to manufacturing scales and manufacturing excellence. Tesla still has a long way to catch up.
- ZeroGravitas 9y agoMy money is on pure electric brands from China winning. The entrenched western groups have too much inertia, and Tesla will point the way but will get bogged down fighting those other corporations and their own government for sane policies. Chinese corps will set up EV only marques and allow them to freely attack ICE competitors where it hurts, even if they don't initially rake in high profits, giving them a feel good halo and they'll get sensible long term support from their government. At the moment Nissan, Hyundai and Mitsubishi are good mid-level electric options and I can see new Chinese entrants sweeping them aside as they take the whole market.
- thisisit 9y agoI have a question. If one were to believe batteries or EV's are our future, what kind of business or startup opportunities does it present?