German car manufacturer Volkswagen AG VWAGY reportedly intends to invest in mines to lower the cost of battery production.

What happened: Volkswagen wants to invest in mines to reduce the cost of battery cells, cover half of its own needs and also sell to third-party customers, according to the CTO. Thomas Schmalreported Reuters.

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Volkswagen, the leading carmaker in Europe, wants its battery launch Power Co becoming a global supplier, Reuters reported, citing Schmall.

However, because raw materials are a major deterrent in battery cell manufacturing, the company needs to “invest directly in mines,” Schmall told Reuters.

Why it matters: Volkswagen is planning this invest around 180 billion euros — about $193 billion — between 2023 and 2027, the company announced earlier this week. About two thirds of the investments flow into electrification and digitization.

With these investments, Volkswagen wants to close the gap to the electric vehicle giant Tesla Inc.
TSLA and increase its share of the battery-powered car market, Reuters reported last week.

Earlier this week, Volkswagen said its first gigafactory overseas for cell manufacturing is founded in St. Thomas, Ontario. After Salzgitter and Valencia, this will be the third group-owned plant worldwide and the first cell factory of the battery company PowerCo in North America.

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