Volkswagen Group breaks ground on first European battery factory

Gasgoo News on July 7, Volkswagen Group broke ground on a new battery plant in Salzgitter, Germany.

The Salzgitter plant is one of six battery plants Volkswagen plans to build in Europe, and it is Volkswagen's first European battery plant.Volkswagen will invest around 2 billion euros in the new battery plant in Salzgitter until 2026.The new plant, scheduled to start production in 2025, will be able to produce 40 GWh of batteries per year at full capacity, enough to produce about 500,000electric vehicles.

From now on, Volkswagen's global battery business will be run by the newly formed company PowerCo.In addition to battery production, PowerCo will be responsible for activities across the battery value chain.By 2030, PowerCo will invest more than 20 billion euros with partners to develop the battery business area, with annual sales of more than 20 billion euros and employ up to 20,000 people in Europe.

PowerCo will be run by executives who have been leading Volkswagen's battery business.Among them, Frank Blome, head of Volkswagen's battery and systems division, will serve as CEO of the division, and former Apple executive Soonho Ahn will serve as chief technology officer.The PowerCo team will oversee activities such as procurement, raw material processing, battery development and management of the proposed plant.

Image source: Volkswagen

At the groundbreaking ceremony, Volkswagen first proposed the concept of a standard factory.The Volkswagen Salzgitter battery factory will be the blueprint for battery factories across Europe and will set new standards in sustainability and innovation.Standardization will include not only equipment, buildings and infrastructure, but also products, processes and IT.Each plant will be powered by 100% renewable energy and will be ready for closed-loop recycling in the future.

Volkswagen also revealed the square-shaped unified battery that was announced at Power Day 2021.The battery has the flexibility to use a number of different battery chemistries and will be used in 80% of the group's models.The new battery takes advantage of synergies and reduces battery costs by 50 percent.So far, the prototype batteries produced by the group have shown excellent performance in terms of endurance, charging time and safety.

“We have hired experienced executives from the battery industry,” Herbert Diess, chief executive of Volkswagen Group, said in an interview. “We are trying to become one of the largest battery producers in the world.”

Diess also revealed that Volkswagen plans to build a battery factory in Valencia, Spain, possibly another in Eastern Europe near its assembly plant, and is looking for potential new sites in the United States.He added that VW is open to inviting more partners to participate in the battery promotion.

However, Volkswagen has also encountered challenges in terms of batteries.Automakers are facing sweeping changes to their supply chains as they transition to electric vehicles, and soaring raw material prices could hit their profits.