Volkswagen had mixed feelings about making its own battery cells for its upcoming new series of electric vehicles, but now it is warming up to the idea – especially when it comes to the next generation of solid state battery cells.

Back in 2016, VW launched a new commitment to electric vehicles as they slowly started to distance themselves from diesel following the Dieselgate scandal.

With a goal to make 3 million electric vehicles per year between all their brands (VW, Audi, Porsche, etc.) by 2025, they considered to make their own battery cells in order to support the extremely high production rate, but they ended up abandoning those plans.

Instead, they issued battery supply contracts worth $48 billion with existing battery manufacturers.

During the second quarter financial result release, VW CEO Herbert Diess said that he doesn’t want to become dependent on those manufacturers:

“We must not make ourselves dependent on a few Asian manufacturers in the long term,”

Right now, it looks like their sourcing plans are in place up to 2025, but he said that he sees a path to solid-state battery production by then and VW could build its own factory in Europe.

Last month, VW made an investment in a startup developing solid-state battery technology.

Solid-state batteries are thought to be a lot safer than common li-ion cells and could have more potential for higher energy density, but no one has figured out a way to mass produce long-lasting solid-state cells at a reasonable price yet.

Last year, the German automaker said that it sees a need for 40 Tesla Gigafactory-size battery factories by 2025.

Tesla already has one of those and two more in the works.

Most other automakers are taking the same route as Volkswagen – meaning to work with existing battery suppliers.

During Tesla’s own earnings release yesterday, CEO Elon Musk said that their “biggest growth limiter” is “how fast can they grow battery production and especially cell production and the whole supply chain.”

It is becoming an important focus for all automakers serious about battery-electric vehicles.

Volkswagen’s volume electric vehicle production should technically start this year with Audi’s e-tron quattro, but it will start to significantly expand next year with several new vehicles leading to the mass-market I.D. electric car in 2020

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