On December 13, 2021, Volkswagen announced the formation of a European company to integrate its activities along the battery value chain, from raw material processing to the development of integrated Volkswagen batteries and the management of European gigafactories.
Volkswagen said it will include a new business model based on reusing discarded car batteries and recycling the valuable raw materials contained therein. Volkswagen added that we are creating an efficient and forward-looking structure for the fast-growing battery business.
The new company will be led by Battery President Frank Blome, and battery development will be led by Ahn Soon-ho, who served as the global head of battery development at Apple after working with LG Electronics and Samsung.
Volkswagen plans to build six gigafactories in Europe to meet the growing demand for batteries within the group. Production of batteries is expected to begin in Salzgitter in 2025. The Gigafactory in Lower Saxony will produce integrated batteries for the mass production of the Volkswagen Group. Initially, the plant's annual production capacity will be set at 20 GWh and plans to expand to 40 GWh.
The Volkswagen Group will invest 2 billion euros to develop battery production in Salzgitter.
The plant in Salzgitter, Lower Saxony, will be the battery center of the Volkswagen Group, integrating development, planning and production management. It also plans to build more gigafactories in Spain and Eastern Europe. The exact location of Gigafactories 3 and 4 will be determined in the first half of 2022.
While the newly formed European company is developing the five gigafactories, Swedish startup Northvolt AB (with a around 20% stake in Volkswagen) will build another plant in Skelefteo, north of Sweden. Production of batteries for high-end cars begins in 2023. Northvolt is forging a partnership with the Volkswagen Group in the field of premium batteries.
Volkswagen is promoting the industrialization of battery technology at all levels of the value chain. This week, Umicore signed two strategic partnerships with 24M and a long-term supply contract with Vulcan Energy for lithium hydroxide.
The goal of the partnership is to support the manufacture and procurement of major materials and optimize battery manufacturing in planned gigafactories. The partnership aims to build expertise in battery technology and optimize cost management.
Over the next five years, the Volkswagen Group plans to invest around 52 billion euros in the development and production of new electric vehicles. The new vehicle strategy also includes the development of new business areas such as batteries, charging and energy. The group is also creating dedicated technology platforms to enable synergies between brands, including the modular electric matrix MEB and SSP platforms to be launched in 2026.