Volkswagen is rapidly pursuing its e-mobility strategy: to start its battery offensive, the Volkswagen Group launched on July 07, 2022, in the presence of German Chancellor Olaf Scholz, its first cell plant in Salzgitter. Production will begin in 2025. From now on, responsibility for battery operations worldwide will be taken over by the newly created company “PowerCo”. In addition to cell production, the new company will take over all activities related to the battery value chain. PowerCo plans to invest by 2030 more than 20 billion euros in the development of this sector of activity, generate annual sales of more than 20 billion euros and employ up to 20,000 people in Europe.
German Chancellor Olaf Scholz said at the inauguration ceremony: “Today is an important day for the automotive industry in Germany and Europe. Volkswagen is showing what the future of sustainable and climate-friendly mobility can look like. It is basically here in Salzgitter that we are laying the foundation for the future together. »
Herbert Diess, Chairman of the Board of Management of Volkswagen AG, added: “Today we are not only laying the foundation stone, we are also marking an important strategic milestone. The battery cell sector is one of the cornerstones of our NEW AUTO strategy, which will make Volkswagen the future leader of sustainable, software-driven mobility solutions. Construction of our cell factory is a huge technical and economic project. It shows that we are bringing the modern technology of the future to Germany! »
PowerCo Consolidates Its Global Battery Business
The Volkswagen Group is consolidating its worldwide battery operations into the European (SE) company PowerCo. From Salzgitter, the company will manage from the start the operation of the global plants, the development of cell technology, the vertical integration of the value chain and the supply of machinery and equipment to the plants. Later, other products are planned, such as high-capacity storage systems for energy networks. After Salzgitter, the next cell factory will be located in Valencia. Sites are currently being identified for three other cell factories in Europe. Apart from Europe, PowerCo is already studying the possibility of building other ‘gigafactories’ in North America.
PowerCo will be led by Frank Blome, CEO, and Board members Sebastian Wolf (Chief Operating Officer), Kai Alexander Müller (Chief Financial Officer), Soonho Ahn (Chief Technology Officer), Jörg Teichmann (Chief Procurement Officer) and Sebastian Krapoth (Chief Human Resources Officer).
Thomas Schmall, Member of the Board of Management of Volkswagen AG in charge of technology and Chairman of the Board of Management of PowerCo, said: “By building our first cell factory within the Group, we are constantly implementing our technology roadmap. PowerCo will be a global player in the field of batteries. The company’s main strength will be vertical cooperation, from raw materials and cells to recycling. Going forward, we will manage all key activities internally and gain a strategic competitive advantage in the race to lead in e-mobility. We have created a top-level team for this major project. »
Daniela Cavallo, President of the General Construction Council of Volkswagen AG, added: “Today is a day of celebration. In the heart of Europe, we are creating a new place with a future and up to 20,000 jobs, including 5,000 in Salzgitter, at the headquarters of Volkswagen. We are wholeheartedly committed to this process and take our responsibilities in the transformation of our plant the pride of the engine and the care of long-term careers for its employees. This principle remains one of our guidelines, as it was very early in the field of the future of batteries; it is rooted in the ‘Contract of the Future’ and has been strongly defended by many years. Thanks to these efforts, we now have a demonstration of ecological and social change. »
Lower Saxony Minister-President Stephan Weil said: “In Salzgitter we can see the transformation of the automotive industry more clearly than anywhere else in Germany. Battery cells will soon be produced where conventional engines are still coming off the production line. The jobs of the future are being created here. In the future, the heart of The automotive industry will be electrified. And it will hit in Lower Saxony. »
A model factory as a standard and unified box enables rapid global deployment
At the launch event, the VW Group presented a factory-scale concept for the first time: Salzgitter will serve as a model for cell factories across Europe and will set new standards in terms of sustainability and innovation. “What we have tried many times with car systems such as MQB and MEB will also serve as a basis for starting cell production. We will start on the basis of European standards and increase the level of standards by standardizing our model. In this way we will combine the improvement of speed and cost and the highest standards of quality. », said Frank Blome, CEO of PowerCo. Architecture will not only cover equipment, buildings and infrastructure, but also products, processes and IT. Therefore, we will create industries that can be quickly adapted to respond to new innovations in products and production. Each plant will use 100% electricity from renewable sources and will be designed for future closed-loop recycling.
Volkswagen also launched the integrated principle of the prismatic battery cell announced on Energy Day 2021. This principle allows a large number of different compositions to be used and will be used in almost 80% of all models in the group. In Salzgitter, the unitary cells for the molecular component will be produced from 2025. In the future, the plant should reach an annual capacity of 40 GWh, which is enough for around 500,000 electric cars. By 2030, the Volkswagen Group intends to operate, together with partners, six cell factories with a total of 240 GWh across Europe. The new integrated cell enables synergy effects to be used and will lead to a reduction in battery production costs of up to 50%. The prototypes released so far have shown very promising performance in various aspects, payment time and security – important conditions for the future industry standard.
Photo – Video: Volkswagen