Volkswagen US chief warns of industry challenges with EV battery shift

A Volkswagen ID Buzz, a fully electric-driven microbus, being assembled in the VW plant in Hanover, Germany, on June 16, 2022. PHOTO: AFP

NEW YORK (REUTERS) - Volkswagen's top US executive said on Thursday (June 16) the United States faces major challenges in ramping up battery production to facilitate a shift to electric vehicles (EVs), including attracting skilled workers, mining for key metals and supply chain issues.

Mr Scott Keogh, chief executive of Volkswagen Group of America, told an Automotive News forum in Washington that the move to EVs is the single biggest "industrial transformation in America".

Automakers and battery companies are committing tens of billions of dollars to building new battery plants and EV assembly plants throughout North America as they scale up electric vehicle production. This move, focusing on vehicles powered by advanced new batteries rather than petrol, requires the US to overcome a series of challenges, Mr Keogh said.

These challenges include attracting enough skilled workers, dramatically boosting and facilitating US mining for critical minerals to produce the lithium batteries needed for EVs, supply chain issues and, more broadly, addressing healthcare, education and infrastructure, Mr Keogh said.

The CEO told Reuters on the sidelines of the forum that potentially hundreds of thousands of people could be employed by 2030 in US battery industry production.

"It comes down to labour, it comes down to the infrastructure, it comes down to the investment," Mr Keogh said.

President Joe Biden has set a goal of 50 per cent of new vehicle sales being electric or plug-in electric by 2030, but has not endorsed phasing out petrol-powered vehicle sales by any specific date.

Mr Keogh estimated that the US is making 150,000 to 200,000 batteries a year and that seven years from now, "we need to be making 8.5 million batteries" annually.

"This is a scale of investment that, honestly, is going to make the industrial revolution look like a cakewalk. It is massive," he said.

Mr Keogh also said the US needs to do more to boost manufacturing capacity. The American manufacturing sector has fallen from than 17 million jobs in 2000 to 12.8 million today, rebounding to about pre-Covid-19 pandemic levels.

"We need to build a collective ecosystem turning America into a manufacturing society again. I think America has become a service economy," Mr Keogh said. "The challenge of getting somebody who has been working at a Starbucks taking 20-minute breaks, smoking a cigarette out back and is now jumping into a factory... is a whole new world."

Mr Keogh said long shifts for factory workers are much different.

"This is brutal, difficult, challenging work," he said.

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