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VW to Challenge Tesla's Gigafactory in Attempt to Redeem Itself from Diesalgate Scandal

By mikey b , May 30, 2016 06:01 AM EDT
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Volkswagen is trying to get past the massive Dieselgate scandal that has rocked the large car manufacturer to its core. Not only has this caused the company billions of dollars, but its goodwill from consumers worldwide was also affected. Now, they are trying to beat Tesla in its own game by announcing a massive $11 billion electric-car battery factory.

Dieselgate and VW's Redemption

The Dieselgate scandal has centered on the fact that diesel emissions from Volkswagen were cheated to comply with US standards. Now, an electric car-centered push is happening.

So far, details have been sketchy regarding this plant that is poised to eclipse Tesla's own $5 billion Gigafactory. The story, first released by Handelsblatt, says that the reason for the investment into electric vehicles is to get past the Dieselgate scandal, Quartz reported.

Additionally, Volkswagen also poured in $300 million last May 24 as capital investment in Gett, an Israeli ride-sharing company. When the VW board meets on June 22, they are expected to give the green light to their new battery factory.

This factory will be set to rival all electric battery makers that have spent years perfecting the many bugs of this technology. It will be highly risky for VW to develop this technology, while trying to avoid all the Asian giants that have already developed this tech from scratch such as Panasonic,which makes Tesla batteries, and LG, which supplies batteries to GM and many others.

VW is intent on selling 1 million purely electric cars by 2025. Elon Musk, Tesla CEO, has targeted this same volume by the year 2020.

VW's Biggest Competition

A previous iTechPost article explored Musk's Gigafactory. It will be located in Reno and the factory hopes to slash costs by around one third. With this alone, Tesla cars are expected to significantly reduce prices to consumers.

Construction began in 2014 and will reach full production capacity by 2020. Aside from car batteries, the factory will also manufacture stationary batteries used for solar power of homes and businesses.

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