
VW announces $84B investment in electric cars and batteries - dannylandau
https://electrek.co/2017/09/11/vw-massive-billion-investment-in-electric-cars-and-batteries/
======
princeb
This 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
The 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-
fran...](http://www.businessinsider.de/bmw-electric-mini-concept-frankfurt-
motor-show-2017-8?op=1&r=US&IR=T)

edit: corrected what I said about the i3, there are full electric versions

~~~
devy
i3 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.

------
ckastner
Finally, 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.

~~~
ZeroGravitas
My 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.

~~~
mariushn
What are some of those new Chinese entrants?

~~~
ZeroGravitas
BYD is a battery maker that also does electric cars and buses now. Warren
Buffet has invested with them.

Geely have bought Volvo and also make the new hybrid London Taxi, and are
trying to make a delivery van platform from it.

------
ams6110
So 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.

~~~
wil421
I 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
By 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?

~~~
joshvm
A big problem with ICEs is that you need a large and heavy component (the
engine) somewhere practical and accessible. In most consumer vehicles you
can't put it anywhere but the front or the rear because the passengers get in
the way. Making the car aerodynamic helps here, because you end up with dead
space in the hood/trunk which you can put stuff in. Of course Tesla uses this
for luggage.

Putting the batteries underneath is a natural solution, giving you a nice low
centre of gravity. Virtually all the stuff in the engine bay is unnecessary on
an EV. If you have a motor for each wheel, you can distribute weight very
evenly.

There are also advantages for cooling, possibly. A long, thin, cuboid gives
you more surface area than a squat cuboid.

------
mbloom1915
Don'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...

------
singularity2001
How much debt do they have to take to make such an investment?

~~~
bischofs
I 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
VW spends a lot on R&D but it's not 50% of revenue. More like around $14
billion.

~~~
bischofs
Many 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...

------
TsomArp
Why so many cars? 300!

~~~
King-Aaron
Remembering, 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

~~~
simonh
Also 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/revi...](http://www.carbuyer.co.uk/reviews/volkswagen/sharan/mpv/review)

------
thisisit
I 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?

------
Invictus0
The 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-...](http://www.bbc.com/future/story/20150402-the-worst-place-on-earth)

[https://www.theguardian.com/environment/2012/aug/07/china-
ra...](https://www.theguardian.com/environment/2012/aug/07/china-rare-earth-
village-pollution)

[http://e360.yale.edu/features/boom_in_mining_rare_earths_pos...](http://e360.yale.edu/features/boom_in_mining_rare_earths_poses_mounting_toxic_risks)

~~~
Brakenshire
Rare 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.

~~~
rawfan
The 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
Yes, 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.

------
kolbe
LOL. Their market cap isn't even that high.

~~~
bischofs
They 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
Only 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.

------
ramshanker
VW announces "XY" $. Compare this with Tesla's style, "Starting next week."

~~~
_Codemonkeyism
Yes 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
That's actually the point. Tesla gets customers excited about their next
product. Volkswagen makes financial announcements to please investors and
regulators.

------
captaintacos
I 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
This 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...](https://electrek.co/2016/11/01/breakdown-raw-materials-tesla-
batteries-possible-bottleneck/)

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_moto...](https://en.wikipedia.org/wiki/Electric_vehicle#Electric_motor)
is correct).

~~~
cconcepts
This comment is a great example of why one should triple check anything they
intend to post to HN.

~~~
csours
[https://meta.wikimedia.org/wiki/Cunningham%27s_Law](https://meta.wikimedia.org/wiki/Cunningham%27s_Law)

Cunningham's Law states "the best way to get the right answer on the internet
is not to ask a question; it's to post the wrong answer."

~~~
sitkack
This is true in general for humans, the best way to start a design discussion
is, "I propose that we do X to solve Y!" rather than, what are some solutions
to problem Y? People are much better at correcting than creating from a blank
page.

------
yaegers
I 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
_I 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?

~~~
PixelB
We have plenty of energy supply in the system, we need to optimize our
distribution.

We only use about 39% of the electricity we generate. I know that seems
strange, but it's true.

[https://c1cleantechnicacom-wpengine.netdna-
ssl.com/files/201...](https://c1cleantechnicacom-wpengine.netdna-
ssl.com/files/2013/08/LLNL_Flow-Chart_20121.png)

~~~
pjc50
You've misinterpreted "rejected energy" there, it's due to Carnot inefficiency
not distribution problems.

