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June 17, 2020 2:45 PM, EDT

Volkswagen, Battery Firm Eye Pilot Plant for Electric SUV Production

A worker completes an electric VW car on an assembly line in Germany on Feb. 25..A worker completes an electric VW car on an assembly line in Germany on Feb. 25. (Jens Meyer/Associated Press)

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Volkswagen has boosted its stake by $200 million in a San Jose, Calif., company that targets solid state battery technology, and the two partners are looking at setting up a pilot plant.

The German automaker, which is currently investing $800 million in its Chattanooga factory to make electric vehicles by 2022, said solid state batteries are expected to significantly increase range and shorten charging times.

VW already has invested more than $100 million in QuantumScape Corp. and is that company’s largest automotive shareholder.

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“The additional investment will effectively strengthen and accelerate our joint development work,” said Thomas Schmall, Volkswagen Group Components’ chairman of the board of management.

Volkswagen and QuantumScape collaborated in a joint venture to enable industrial-level production of solid state batteries since 2018.

The companies envision setting up a pilot plant and the plans are expected to be firmed up this year, according to VW. A location for such a plant wasn’t named.

The Chattanooga factory’s current expansion, aimed at making an electric SUV called the I.D.4, includes a 198,000-square-foot facility for assembly of battery packs for the vehicle. Chattanooga will become VW’s North American base for electric vehicle production, according to the company.

Tom du Plessis, the Chattanooga plant’s chief executive, said recently that work on the expansion is on time despite the coronavirus outbreak prompting the suspension of vehicle production. Assembly restarted in Chattanooga a month ago.

Solid state batteries are seen by many as the most promising technology for e-mobility. According to VW, a solid state battery the same size as a current battery pack could enable ranges for electric vehicles comparable to conventional drivetrains.

Frank Blome, head of the battery cell business at Volkswagen Group Components, said the company is securing its global supply base with efficient producers, gradually building up manufacturing capacities and driving the development of cutting-edge solid state battery technology.

“Our focus in this context is on long-term strategic partnerships,” he said.

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