Volkswagen (VW) took a step forward to gather momentum in electric vehicle (EV) production. The Europe-biggest carmaker will establish a European company to take charge of activities along the battery value chain, according to the company's press release.
The new enterprise's responsibilities include processing raw materials, developing a unified battery for Volkswagen and managing the manufacturer's giga factories in Europe. The company will adapt to new business models based around reusing discarded car batteries and recycling valuable raw materials.
Thomas Schmall, CEO of Volkswagen Group Components, said the carmaker wants to offer customers powerful, inexpensive, and sustainable vehicle batteries. The company already has a battery team in Salzgitter, Germany, with 500 employees.
"We are now bundling our power in Salzgitter, with the aim of encouraging innovation and securing the support of the best partners for our new company going forward," Schmall added.
According to VW, it intends to open six battery cell factories in Europe by 2030. The one in Salzgitter is set to start production in 2025 with an annual capacity of 20 GWh initially and growing to 40 GWh later.
Additional plants are planned to be built in Spain and Eastern Europe. The company will decide the exact locations for giga factories 3 and 4 in the first half of 2022.
A total of EUR2 billion (US$ 22.5 billion) has been earmarked for the construction and operation of the Salzgitter plant up to the beginning of production, VW said.
Schmall previously told Reuters it takes EUR25 billion to EUR30 billion to build the battery cell plants in Europe and acquire raw materials, according to the media outlet's report.
In addition, Sweden-based Northvolt AB, of which VW holds approximately 20% of its stakes, will build a further factory in northern Sweden, according to VW. The plant will manufacture battery cells for the premium automotive segment starting in 2023.
VW plans to invest EUR52 billion in new EV development and production in the next five years. The company received a boost through three strategic partnerships in early December.
According to a press release, VW and Umicore, a global materials technology and recycling group, will start a joint venture to provide the automaker cathode materials. VW said the goal is to power about 2.2 million BEVs annually with 160 GWh by 2030.
Additionally, VW and Vulcan Energy Resources have signed a long-term agreement regarding the supply of CO2-neutral lithium from the Upper Rhine Valley in Germany, VW said.
The automaker is also investing 24M Technologies to develop production technology for its cell plants, according to the press release. 24M is a US-based battery startup spun off from the Massachusetts Institute of Technology.
VW said the collaboration between the two companies will generate considerable cost optimization in battery production by cutting down material use and removing steps from the conventional production process.
