author: Vineeth Joel Patel
With so many automakers relying on electric cars, batteries are going to be hard to come by in the near future. Earlier this year, Volkswagen said more than 70% of its European sales will come from electric cars by 2030. In other regions, such as China and the United States, the automaker estimates that electric cars will account for 50% of its sales. To achieve these big goals, Volkswagen is going to need a whole bunch of car batteries. Instead of looking to other companies for its needs, Volkswagen recently announced that it will be launching a separate European company that will take care of all of its battery needs.
New battery gigafactories are coming
The new battery company will be in charge of all activities involving a battery for an electric car. This includes processing raw materials to create batteries and recycling old ones. The aim is to keep things in-house as much as possible and help Volkswagen become the world’s leading manufacturer of electric vehicles. As part of the new battery company, VW will build six gigafactories in Europe, the first of which will be located in Salzgitter, Lower Saxony and become operational in 2025.
The Salzgitter gigafactory will have an annual capacity of 20 gigawatt hours when it is first commissioned, with production expected to double to 40 gigawatt hours at a later date. The Salzgitter plant will also house the automaker’s battery research and development center, as well as the brand’s battery recycling plant.
“We want to provide powerful, inexpensive and durable vehicle batteries to our customers, which means we need to be active at all stages of the battery value chain that are critical to success,” said Thomas Schmall, Member of the technology board. at Volkswagen AG and CEO of Volkswagen Group Components. “We are now concentrating our energy in Salzgitter, with the aim of encouraging innovation and securing the support of the best partners for our new business in the future. We already have a strong battery team in Salzgitter consisting of 500 employees from 24 countries — and we continue to strengthen this team at the executive level. “
Why have battery factories?
Volkswagen’s second gigafactory will be commissioned in northern Sweden and will be built by start-up Northvolt AB. The German automaker has a 20% stake in the start-up, so it makes sense to use its connections for another company. The gigafactory in Sweden will be tasked with producing batteries for Volkswagen’s premium electric cars and will start production next year. Other gigafactories will be installed in Spain and Eastern Europe. All six sites will be launched before the end of 2030.
Going forward with building a company that focuses solely on Volkswagen’s electric car batteries comes at a time when the German automaker is looking to expand its EV push. This year’s serious supply chain issues have given automakers something to think about: move operations in-house. Tesla set the standard by investing heavily in battery production at its own facilities and has become a major force in the industry, leading others to follow a similar path.