The official launch of a new battery business that would invest $20 billion through 2030 to become a worldwide EV leader took place on Thursday as the Volkswagen Group broke ground at the first of six battery plants it expects to develop in Europe.
Volkswagen’s new entity, PowerCo, will be in charge of managing the value chain from raw materials to recycling for the automaker’s global battery business. With the worldwide market for EVs heating up, the manufacturer anticipates that the factory in Salzgitter, Germany, and the five others slated for Europe, will cut its battery costs in half, giving it a significant competitive advantage.
This is it. Our first own battery factory. #Salzgiga pic.twitter.com/DmO5O2TwIE— Volkswagen Group (@VWGroup) July 7, 2022
The new company and the factories are a part of Volkswagen’s attempts to increase EV production on a global scale. The second-largest automaker in the world earlier this week revealed ambitions to expand its operations in China with “some big investments” and a hiring drive at CARIAD, Volkswagen’s in-house automotive software division.
The Salzgitter factory, which will serve as the standardized model for future facilities, will start producing battery cells in 2025, according to Volkswagen, making it simpler to reproduce and scale. PowerCo is exploring bringing the product to North America and will situate its second cell factory in Valencia, Spain. The four more European factories’ locations are yet unknown.
Volkswagen Group’s foreign manufacturing operations will be overseen by PowerCo, which will also develop cell technology, vertically integrate the value chain, and provide the plants with machinery and equipment. It is anticipated that the Salzgitter factory will produce 500,000 EVs. The additional facilities anticipated for Europe might produce about 3 million EVs in total.
By 2030, PowerCo and partners would invest more than 20 billion EUR ($20.34 billion), according to Volkswagen, and up to 20,000 people might be employed in Europe. The creation of energy grid storage technologies is one of the additional projects.