Volkswagen is pressing ahead with its plan to become the global leader in electrification. And because electrification without batteries is not possible, the automotive giant held the opening ceremony for the construction of the Volkswagen Group's first battery plant in Salzgitter in the presence of German Chancellor Olaf Scholz. The plant will start operations in 2025 and from now on the newly established company "PowerCo" will be responsible for the production of cells and the Group's global battery activities.
By 2030 PowerCo, together with partners, is to invest more than €20 billion to develop the business model, generate annual sales of more than €20 billion and employ up to 20,000 people in Europe alone.
German Chancellor Olaf Scholz said at the opening ceremony of the plant: "Today is a good day for the automotive industry in Germany and Europe. Η Volkswagen shows us what the future of sustainable and climate compatible mobility could look like. Together, we are laying the foundations for shaping this future with the Salzgitter plant."
Herbert Diess, CEO of Volkswagen AG, said: "Today we are not only laying the foundation stone for the plant, but also marking a strategic milestone. The battery cell manufacturing business is one of the cornerstones of our NEW AUTO strategy, which will make Volkswagen a leading provider of tomorrow's sustainable, digital mobility. Setting up our own cell plant is a huge undertaking from a technical and economic point of view. It shows that we are bringing the cutting-edge technology of the future to Germany!"
PowerCo: The battery company and what it will do
The Volkswagen Group concentrates its global battery activities in the European company PowerCo. Based in Salzgitter, the company will in future manage the operation of the Group's battery production plants worldwide, the supply of machinery and equipment for the plants and the further development of cell technology. Future development of new products, such as large-scale energy storage systems for use in the power grid, is planned. After Salzgitter, the next cell plant is scheduled to be built in Valencia. At present, sites for three more plants in Europe are being considered, and PowerCo is also exploring the prospect of further Gigafactories in North America.
Thomas Schmall, Member of the Board of Management of Volkswagen AG, Head of Technology and Chairman of the Supervisory Board of PowerCo, said: "By building the first cell production plant, we are consistently implementing our technological development programme. PowerCo will become a global player in the battery business. The company's key advantage will be the vertical management of processes, from raw material supply and cell manufacturing to recycling. In the future, we will handle all related activities internally, giving us a strategic advantage over the competition in the race to become a leader in electromobility. We have secured a top team for this major project."
The standard factory and the integrated cells
On the occasion of the opening ceremony, the Volkswagen Group presented for the first time the factory model that will set the standard. Salzgitter is to be a model for cell plants across Europe and will set new standards in terms of sustainability and innovation. Frank Blome, CEO of PowerCo said: "What we have tested millions of times with vehicle platforms such as MQB and MEB will also form a foundation for cell production: we will standardise and scale up. In this way we will combine speed, cost optimisation and a top level of quality." Standardisation will not only concern equipment, buildings and infrastructure, but also products, processes and digital technology. In this way, factories will be created that can be quickly transformed to adopt further innovations in products and production. Each factory will be powered exclusively by electricity from renewable sources and designed for future closed-loop recycling.
Volkswagen also unveiled the prismatic unified cell announced at the Power Day in 2021. This technology allows the flexible use of a combination of different chemical compositions in the battery cells and will be used in up to the 80% of Volkswagen Group models. Production of unified cell batteries will start in Salzgitter in 2025. The plant's annual production capacity will gradually reach 40 GWh - enough for around 500,000 electric vehicles. By 2030, the Volkswagen Group intends to have six cell production plants in operation in Europe with a total annual production volume of 240 GWh. The new integrated cell is expected to reduce battery costs by up to 50%. The prototype batteries produced with this technology have shown promising performance in terms of autonomy, charging time and safety - necessary prerequisites for a future industry standard.
