Volkswagen invests in California battery start-up

German car giant Volkswagen said Wednesday it would invest $10 million in an American startup specialising in battery technology, part of its mammoth transition to electric driving in the coming years.

California-based Forge Nano is developing a chemical process to make battery cells more efficient.

“A higher energy density would have positive effects on the range of electric vehicles,” Volkswagen said in a statement, adding that it would “provide support for industrial trials of this technology.”

With its twelve brands from Porsche to Skoda, the Wolfsburg-based group has budgeted 44 billion euros ($50 billion) for its electric transition between now and 2023.

Small venture capital investments beyond traditional auto industry suppliers show VW is “increasingly investing in international start-ups to bring innovative technologies forward to production maturity,” the firm said.

In September 2018, it announced a $100 million investment in California’s Quantumscape, which is working on next-generation solid-state batteries that could replace today’s lithium ion cells.

Across the German car industry, big firms are splashing out on investment in a bid to catch up the electric head start seized by competitors from abroad, having sat out developments until VW’s “dieselgate” emissions cheating scandal broke in 2015.

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