Volkswagen will procure pouch-type batteries from Chinese company A123.
According to Chinese media Jiemian, A123, a part of China’s Wanxiang business group, was preparing to supply pouch-type batteries to the German automobile giant within the next two years. The batteries are expected to be applied to electric vehicles (EV) launching in 2023.
Wanxiang acquired A123 in 2013. Volkswagen signed a 10 billion won battery supply deal with A123 in July last year.
A123 manufactures mostly pouch-type batteries. It can make both nickel, cobalt and manganese (NCM) and lithium iron phosphate (LFP) batteries.
While Volkswagen prefers prismatic batteries, considering price and supply, it will likely also continue to use pouch-type batteries in the near future, a person familiar with the matter said.
Volkswagen earlier announced on its Power Day event that it will use a new unified cell battery starting in 2023. It was interpreted as the German company planning to use only prismatic batteries going forward.
In May last year, Volkswagen acquired a 26.4% take for 1.1 billion euro of Chinese battery maker Guoxuan. It also announced that it will spend 450 million euros on European battery maker Northvolt to build a battery plant in Germany. Both battery makers focus on manufacturing prismatic batteries.
Volkswagen’s MEB EV platform supports both prismatic and pouch-type batteries. ID.3 EV, to be sold in the US, uses pouch-type batteries. There is no prismatic battery plant in the US. LG Energy Solution and SK Innovation, which have plants in the US, only manufacture pouch-type batteries there.