MUNICH — Volkswagen Group CEO Herbert Diess is optimistic that there are adequate funds, inside or exterior, to drag off its formidable plan to construct six giant battery factories throughout Europe with companions by the tip of the last decade.

“The required capital is out there available in the market. Northvolt has proven this,” Diess mentioned on the sidelines of the Munich auto present.

Swedish battery cell maker Northvolt, by which Volkswagen owns a 20 % stake, raised $2.8 billion in June in one of many largest non-public placements in Europe this yr that was led by 4 Swedish pension fund and OMERS Capital Markets.

“Right this moment, the returns that may be earned with battery manufacturing are excessive. It’s a demand-driven market and stays a demand-driven marketplace for the foreseeable future,” Diess mentioned.

Constructing new battery cell crops, which often price round 2 billion euros ($2.4 billion) apiece, are a key requirement for VW’s imaginative and prescient to grow to be the world’s leaders in electrical autos.

VW in March outlined its battery cell push, which it plans to drag off with companions, however has thus far not specified precisely how a lot it is going to price and what share the automaker plans to fund by itself.

The six European factories can have joint manufacturing capability of as much as 240 gigawatt hours a yr, with the primary 40 GWh coming from Northvolt from 2023.

The second plant will likely be constructed within the metropolis of Salzgitter by 2025 in partnership with China’s Gotion Excessive-Tech, by which VW owns a 26 % stake, with Spain and jap Europe potential places for a 3rd and fourth plant.

Two extra crops are to be in-built subsequent years however VW has not specified the place in Europe they are going to be situated.

Diess in Might mentioned that components of VW’s battery actions may very well be individually listed in an preliminary public providing.