In a move aimed at reducing the cost of electric vehicles (EVs) and accelerating their adoption, Volkswagen AG has announced a deal with Ford Motor Co. to supply battery cells to the American automaker.
The partnership, announced on Wednesday, will enable Ford to purchase battery cells from VW’s new “Sustainable Mobility” business unit. The cells, derived from raw materials mined from the earth, are seen as an important step towards reducing the cost of EVs and making them more accessible to consumers.
“This agreement underscores Ford’s commitment to electrification and sustainability, and brings together two global leaders in the automotive industry,” said Ford CEO Jim Hackett. “We are confident that this collaboration with Volkswagen will make it possible to take the next step in our EV journey, reducing cost and delivering even more choice for customers.”
VW’s Sustainable Mobility unit, which was launched in 2020, was established to provide a more efficient way for automakers to source battery cells. By leveraging VW’s extensive supply chain and mining operations, the company aims to reduce the cost of raw materials used in batteries and make EVs more affordable.
“We are delighted to join forces with Ford to deliver sustainable mobility to more people around the world,” said Volkswagen Group CEO Herbert Diess. “By working together, we will be able to make EVs more affordable and accelerate the transition to a zero-emission future.”
The partnership between Ford and VW is the latest example of automakers teaming up to reduce the cost of EVs. Last year, General Motors and Honda announced a joint venture to develop and manufacture a new generation of battery cells, while Fiat Chrysler Automobiles and PSA Group have also formed an alliance to share development costs for electric vehicles.
With the cost of EVs still a major barrier to widespread adoption, the collaboration between Ford and VW is a welcome development. By reducing the cost of raw materials used in batteries and leveraging their respective supply chains, the two companies aim to make EVs more affordable and accessible for consumers.