Volkswagen Strikes Deal to Mass-Produce Solid-State Batteries for Electric Cars

Volkswagen has signed a deal to mass-produce solid-state battery technology for its future electric vehicle range.

The technology comes from California-based battery company QuantumScape, which will license its formulation to PowerCo, Volkswagen's in-house battery division. The two parties will then work together to finalize “a product that will be expanded to be integrated into the Volkswagen Group vehicle range,” says QuantumScape.

Work on the agreement has been underway since at least January 2024, when PowerCo successfully tested a sample of a battery cell from QuantumScape. The results exceeded expectations, showing 95% range retention over 300,000 miles. In comparison, today's electric car batteries tend to lose about 20% of their range over a much shorter distance. Solid-state batteries can also provide much higher electrical range, faster charging, and improved safety.

“We have been collaborating and testing QuantumScape prototype cells for years, and look forward to bringing this future technology into series production,” says PowerCo CEO Frank Blum.

The batteries are not quite ready for mass production and still need further testing. Volkswagen can only operate the production line after making “satisfactory technical progress” and paying QuantumScape a $130 million advance fee. If all goes according to plan, Volkswagen will have enough QuantumScape cells to power millions of electric vehicles a year.

“Electric vehicles are the future of mobility, and this agreement with QuantumScape will ensure that the global Volkswagen Group has access to this leading battery technology for years to come,” says Thomas Schmal, Member of the Board of Management of the Volkswagen Group for Technology.

New battery technology, along with a recently announced software partnership with Rivian, may be what Volkswagen needs to accelerate its electric vehicle sales, which fell in the second quarter, according to InsideEVs, even though hybrid vehicle sales rose 17%.

Other electric vehicle makers could also license QuantumScape technology in the future, as the deal is not exclusive to Volkswagen. However, Volkswagen is the first in this space and owns a 17% stake in QuantumScape, according to Reuters.

Toyota has also reportedly signed a mass production deal for solid-state batteries, which will be produced as soon as 2028, as have Mercedes and Honda. At the same time, most major electric vehicle makers are testing a variety of newer generation battery chemistries, such as silicon batteries. The technology being developed could help revolutionize electric vehicle driving by the end of this decade, although there are still production hurdles to overcome.