VW creates new European battery business
Battery gigafactories, research and partnerships, all in place Metal Tech News – December 15, 2021
Last updated 12/21/2021 at 2:31pm
Powering up its mission to become the world's leading manufacturer of electric vehicles, Volkswagen Group has established a European public company to consolidate activities along the EV battery supply chain – from processing raw materials, to developing a unified Volkswagen battery, and managing the five European gigafactories the company has in the pipeline.
The German automaker's new battery business will be headquartered in Salzgitter, Germany, which is the site of Volkswagen's first battery gigafactory and where the company recently announced the establishment of the most modern laboratories for cell research and development in Europe.
One of the primary objectives of the Salzgitter battery lab is to develop Volkswagen Group's unified cell, a format adaptable to various mixes of battery chemistries that is expected to unlock synergies and reduce battery costs by up to 50%.
"We want to offer our customers powerful, inexpensive and sustainable vehicle batteries, which means we need to be active at all stages of the battery value chain that are critical for success," said Volkswagen Group Components Chairman Thomas Schmall. "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. We already have a strong battery team in Salzgitter made up of 500 employees from 24 countries – and we are continuing to strengthen this team at leadership level."
Looking to scale up European battery manufacturing in Europe to 240 gigawatt-hours per year, Volkswagen has plans to build five of its own gigafactories there. The roughly 2-billion-euro (US$2.25 billion) Salzgitter plant, set to begin production in 2025, will be the first.
A second factory in Lower Saxony will produce unified battery cells for the Volkswagen Group's volume segment. Other battery factories are being planned for Spain and Eastern Europe, with exact locations expected to be announced early next year.
In addition to the five gigafactories to be run by Volkswagen's newly formed European company, the German automaker is working with Northvolt AB to expand capacity at a factory in Skellefteå, northern Sweden.
Volkswagen owns a 20% interest in Northvolt and placed a US$14 billion order earlier this year for the premium and green battery cells produced by this Swedish startup company.
To ensure it has the materials needed for these six battery gigafactories in Europe, Volkswagen is also forming partnerships all the way up the supply chain.
This includes a long-term supply agreement with Vulcan Energy Resources Ltd. which plans to produce carbon dioxide-neutral lithium from geothermal brines in Germany's Upper Rhine Valley.
"Through this agreement, Vulcan Energy will become a major enabler of Volkswagen's world-leading target to produce carbon neutral EVs, including all raw materials in the battery supply chain," said Vulcan Energy Resource Managing Director Francis Wedin.
At the same time, Volkswagen announced a partnership with Umicore, global materials technology and recycling group, to supply Volkswagen's European gigafactories with cathode materials. This includes securing responsibly produced raw materials, upgrading them into precursor materials, and then mixing them into the requisite cathode chemistries for VW batteries.
To develop cutting-edge production technology for its battery factories, Volkswagen is also investing in 24M, a startup company spun out of the Massachusetts Institute of Technology. Volkswagen hopes to lower battery costs by scaling up the semi-solid process developed by 24M, which reduces material usage and eliminates several steps from conventional battery production processes.
"Volkswagen's unified cell must be at the forefront of performance, costs and sustainability right from the start," Schmall said earlier this month. "With our new partners, we are one step closer to reaching this goal."
Bringing these new partnerships into its new European battery company takes the German automaker another step closer toward "implementing its battery strategy very consistently and at a high pace."