Hyundai Mobis is a subsidiary of the Hyundai Motor Group which makes EV propulsion systems.
The components in question are battery packs and their control modules.
Volkswagen could use these batteries in its smaller models.
Volkswagen and Hyundai Mobis have recently announced a partnership that will see the Korean company supply the automaker with Battery System Assemblies (BSA).
As described by Hyundai Mobis, an entity that is part of the Hyundai Motor Company, the products it will supply include batteries and all of the management systems that are needed to ensure their safe operation.
This means Volkswagen will be able to simply install the BSAs in its vehicles and hook up its own electric motors in order to complete the powertrain.
Rumour has it that the German company will use these components in the next generation of subcompact vehicles that will be built on the MEB Entry platform, such as the ID.2 and various Skoda and Seat models.
Doing so could reduce the production costs of these models by allowing Volkswagen to skip the development of a dedicated powertrain and rely on external sources instead, which is crucial in order to make money off of more affordable electric vehicles.
In order to ensure it can fulfill its new obligation, Mobis will open a new production factory in Spain, the same country where many of Volkswagen’s upcoming affordable EVs are expected to be manufactured.
While collaboration with competing automakers is more and more frequent with the shift toward electrification, this particular partnership might have been more of a necessity for Volkswagen.
Indeed, only last month, the company’s CEO warned VW officials that the financial situation of the second largest automaker in the world is dire, even saying that “the roof is on fire”.
This means that partnering with Hyundai might have been the only solution left to maintain the possibility of making a profit on a new generation of affordable EVs, which might have been abandoned if Volkswagen had decided to continue development all on its own.