Volkswagen is looking to turbocharge its electrification strategy, with executives revealing that it would be forming "PowerCo", a new battery development venture that could begin production as early as 2025.
German Chancellor Olaf Scholz with VW and PowerCo executives at the ground-breaking ceremony on July 7. Image credit: Volkswagen AG
The firm's first plant will be located in Salzgitter, and the venture will see partners invest as much as €20 billion over the next eight years. The "ground was broken", so to speak, in the presence of German chancellor Olaf Scholz.
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“Today is a good day for the automotive industry in Germany and Europe. Volkswagen is showing how the future of sustainable, climate-compatible mobility could look. Together, we are laying the foundation for shaping this future to a significant extent in Salzgitter", Scholz said.
All of Volkwagen's international battery initiatives will fall under one banner following the announcement, with the automaker planning to handle the management of all factory systems, the development of new cell technology, and the handling of supply chains.
Looking ahead, the firm will also look to push the development of energy storage as well as integration with energy grids is planned.
It is expected that, in total, around 20,000 jobs could be created through the construction and later operation of the Salzgitter plant.
VW CEO Herbert Diess has revealed that a plant will be constructed in Valencia once the Salzgitter factory has been completed, with three other European locations currently being scouted. PowerCo is also considering later expansion into North America.
“Today we are not only laying a foundation stone but also marking a strategic milestone", Diess said in a statement.
"The battery cell business is one of the cornerstones of our 'New Auto' strategy which will make Volkswagen a leading provider of the sustainable, software-driven mobility of tomorrow.
"Establishing our own cell factory is a megaproject in technical and economic terms. It shows that we are bringing the leading-edge technology of the future to Germany!”
At the "ground-breaking" ceremony, the firm unveiled blueprints for the first plant, which will act as the standard for its factories across Europe.
Equipment, buildings and infrastructure will be standardised, as will other processes like IT and the products themselves, which the firm hopes will allow for rapid production.
The plants will also run on 100% renewable electricity, PowerCo CEO Frank Blume claims.
“What we have put to the test millions of times over with vehicle platforms such as the MQB and MEB will also lay the foundation for establishing cell production: we will be standardizing on the basis of European standards and upscaling. This way, we will combine speed and cost optimization with the highest quality levels", he revealed.
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The plant will build on the design of its prismatic unified cell unveiled at Power Day 2021.
Once at full capacity, the Salzgitter plant could develop around 40GWh of batteries annually - enough for around 500,000 EVs.
By 2030, VW Group intends to operate six cell factories with a total volume of 240 GWh throughout Europe together with its partners.
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