Volkswagen to boost EV battery capabilities with USD 20 Bn investment

Volkswagen Group is reportedly planning to invest USD 20.38 billion to produce batteries for electric vehicles, a move which could create 20,000 jobs as well as generate annual revenue of around the same amount.

The German automaker is expected to establish a new company called Power Co. to manage its massive operations as it hustles to secure enough materials, capacity, and supplies to fuel its EV efforts.

Power Co.’s announcement was made at the opening ceremony of the first EV battery cell plant in Salzgitter, a city in Germany’s Lower Saxony, which would oversee the entire battery supply chain, including raw material mining, and new technology development, and end-of-life recycling.

Volkswagen CEO Herbert Diess cited that the battery cell business is the crucial pillar of their automotive strategy, which will make the company a leading provider of the sustainable, software-driven mobility of the future. Herbert also shared that building their cell plant is a massive project that requires both technically and financially stability that demonstrates the introduction of the cutting-edge technology of tomorrow to Germany.

Last year, the German automotive behemoth announced its plan to construct six battery cell manufacturing plants in Europe by 2030, including one in Salzgitter and another in Skelleftea, Sweden. While the third facility is expected to be in Valencia, Spain, the fourth production unit is to be set up in Eastern Europe.

Volkswagen is also exploring options for future Gigafactory construction in North America which is expected to have an annual production capacity of 240 gigawatt-hours.

Beginning in 2023, the company intends to implement a new, standardized prismatic cell design for EV batteries across all its brands. However, by 2030, the company is also planning for this unified cell design to power up to 80% of its EVs.

The automotive giant has also signed agreements with two major battery manufacturers, Samsung Group and Contemporary Amperex Technology Co. Limited (CATL), in addition to backing QuantumScape, a California-based startup that is developing solid-state batteries that are more energy-efficient.

Source credits –

https://www.theverge.com/2022/7/7/23198203/volkswagen-ev-battery-factory-power-co-investment

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