Diess expects software to be a key differentiator in future cars (Photo: VW)

Volkswagen Group CEO Herbert Diess is worried that the German auto industry will be overly dependent on Asian battery production once electric vehicle sales start growing.

In an interview with the German business newspaper Handelsblatt, Diess projected an industry-wide battery sales volume of 50 to 60 billion euros a year once EV sales represent 10 pc of vehicle sales in 2025.

Given the size of this requirement and the heavy investment needed, Diess said automotive suppliers would be better positioned to take up battery production than carmakers.

“If a manufacturer such as VW would produce battery cells a company like Daimler probably wouldn’t buy them,” Diess said in the interview. “A cross-brand production would therefore be better.”

The VW chief also said “the intelligence of cars” would be a major factor of differentiation for vehicle makers. “Every car will be its own node in a networked car world,” he said. “A car’s software will play a decisive role here, because it will, to a significant degree, define the character of the car.”