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16-05-2019 | Companies + Institutions | News | Article

Volkswagen to Produce Battery Cells in Salzgitter

Author: Christiane Köllner

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Volkswagen plans to set up its own battery cell production facility in Salzgitter, Lower Saxony. The Supervisory Board and Board of Management of the Group have decided to invest almost one billion euros in this project. 

Volkswagen will be the first German carmaker to start manufacturing battery cells for electric cars. The company announced this on 13 May following a meeting of the Supervisory Board. Volkswagen intends to invest almost one billion euros for this purpose. The carmaker wants to manufacture the battery cells with a partner at the Salzgitter site in Lower Saxony. Wolfsburg-based Volkswagen has not yet announced which battery manufacturer in Salzgitter it will work with. "This is about aligning the Volkswagen Group to play a decisive role in shaping the sweeping transformation of our industry," Volkswagen CEO Herbert Diess commented. "The automotive industry is in the midst of a fundamental transformation, a transformation that we are also vigorously driving forward at Volkswagen," Diess added.

"As part of our comprehensive electrification offensive we plan to secure our battery capacities through strategic partnerships," Supervisory Board Chairman Hans Dieter Pötsch explained. The Volkswagen Group has already formed a "European Battery Union" with European partners to advance battery research throughout Europe. Under the leadership of Volkswagen and the Swedish battery manufacturer Northvolt, the joint research activities will concentrate on the entire battery value chain - from raw materials to cell technology and recycling.

Lower Saxony's Prime Minister Stephan Weil, who is also on the VW Supervisory Board, welcomed the decision in favour of Salzgitter as the location for the first VW battery cell factory. "Today’s decision by the Supervisory Board marks a breakthrough for battery cell production in Lower Saxony. The production of battery cells is crucial for the Number 1 automotive stronghold," said Weil.

Energy prices very high

Volkswagen currently mainly builds combustion engines in Salzgitter, but now the carmaker is already researching cell production in a pilot line. However, the last word on the establishment of a battery cell production facility in Salzgitter has not yet been spoken. According to a background paper from VW, a basic prerequisite for this is that the "economic conditions" are right. "There are several parameters that could be changed to increase the attractiveness of potential German locations," the paper continues. Possible measures include exemption from the EEG levy, support for the granting of investment aid and for infrastructure measures, measures such as the granting of special depreciation allowances or tax advantages. A final decision on the plans and the realisation of the investments is expected by the end of the year. 

Volkswagen has already concluded supply contracts with Asian battery producers for its planned electric cars offensive for the next few years. SKI, LG Chem and CATL from South Korea and China were named as the main suppliers for the first wave of electromobility. Over the next ten years, Volkswagen intends to launch almost 70 new e-models on the market. The number of vehicles projected on the Group's e-platforms is currently 22 million.

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