Volkswagen rallies as much as 8.8% as investors buy into its plans to rival Tesla for electric vehicle dominance

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A Volkswagen worker works on the ID 3, one of Volkswagen’s electric cars.

German car manufacturer Volkswagen rose by as much as 8.8% on Wednesday, extending the gains made the day before when it unveiled its plans for expansion in the electric vehicle market that could make it the world’s leading producer.

Shares were up as much as 8.8% at one point, at 291 euros ($346), their highest since November 2008 and set for a 25% gain so far this week. Volkswagen’s US-listed shares closed 10% higher on Tuesday.

At its “Power Day” on Monday, Volkswagen said it would build six electric vehicle battery factories across Europe and produce predominantly electric cars by 2030. This has triggered a surge in the value of its shares.

Volkswagen also stated it could significantly reduce battery production costs, which in turn would drive down electric vehicle retail prices, and invest into building an electric vehicle software infrastructure to be used across all of its brands.

Disruption in supply chains through factory closures, manufacturing interruptions and delivery delays have put pressure on the car manufacturing industry throughout the pandemic.

By shifting its focus towards electric vehicles over the past year and effectively emulating Tesla’s strategy, Europe’s largest carmaker has gained back a significant amount of ground. Volkswagen shares have risen by 180% since the market crash in March last year.

The company is aiming to dethrone Tesla as the global leading manufacturer of electric vehicles: “Our goal is to secure a pole position,” said Herbert Diess, CEO of Volkswagen, on “Power Day”.

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LG plans to invest $4.5 billion in US battery production to meet growing electric-vehicle demand, including building at least 2 factories

Denise Gray, president of LG Chem Michigan Tech Center.
Denise Gray, president of LG Chem Michigan Tech Center.

  • LG Chem plans to invest more than $4.5 billion in US battery production, a senior executive said.
  • The investment, over four years, would help meet growing electric vehicle demand, Denise Gray said.
  • This includes plans to create at least two new factories, and would create 4,000 new jobs.
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South Korea’s LG Energy Solution, a division of LG Chem which manufactures batteries, plans to invest more than $4.5 billion in its US battery production business over the next four years, a senior executive said.

This includes plans to build at least two new plants.

The company’s investment will result in an additional 70GWh of US battery production capacity to respond to growth in the electric vehicle market, Denise Gray, president of LG Energy Solution’s Michigan unit, said Thursday.

“We are eager to expand our production capacity so that it can meet the needs of the numerous global automakers across the US and Europe,” Gray said. “We are looking at at least two new factories in the US.”

Gray said the planned investment would create 4,000 new US jobs, more than doubling the current combined workforce of the LG Chem unit and its joint venture with General Motors in the country.

The company plans to select plant locations in the first half of the year, Gray said, adding their construction would create around 6,000 indirect jobs.

LG is already nearing completion of a cell manufacturing plant in Ohio with GM and the pair are in advanced talks to build a second facility in Tennessee. LG said on Friday the second plant would have a similar production capacity of around 35 GWh.

LG has been embroiled in a high-profile dispute with rival South Korean firm SK Innovation in the US after LG alleged that SK stole trade secrets.

The US International Trade Commission last month issued a 10-year order prohibiting most US imports of SK lithium-ion batteries. SK has lobbied the White House to overturn the ban, which could also be negated by SK and LG reaching an independent settlement.

LG Energy Solution Senior Vice President Chang Seung-se said the company’s latest US plans were unrelated and “more about (having a) very proactive and preemptive investment plan prior to confirmation of demand from our customers.”

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