Volkswagen to invest just under €1 billion to set up a battery cell production facility with a partner.

Volkswagen announced today that the Supervisory Board and Board of Management approved the plan to build a battery plant in Lower Saxony (Salzgitter), Germany.

The planned investment will be just under €1 billion ($1.12 billion), which sounds like one of the biggest gigafactories in the world.

The German manufacturer currently was producing only battery modules and packs, but in the not too distant future, it will be able to produce cells, which means total vertical integration (including recycling also in Salzgitter).

The press release says clearly that the battery cell production facility will be set up with a partner. But who could it be? SK Innovation is first that comes to mind.

"The Supervisory Board and Board of Management of Volkswagen AG took important decisions for the future of the Volkswagen Group today. As part of its electrification offensive the Volkswagen Group is to move forward with setting up a battery cell production facility in Europe under a partnership. To that end, the Supervisory Board approved investments of just under one billion euros at today’s meeting. It is planned to locate a battery cell production facility in Lower Saxony (Salzgitter)."

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Supervisory Board and Board of Management take important decisions for future of Volkswagen Group

  • Investments of just under one billion euros planned to set up battery cell production facility with partner in Lower Saxony
  • Volkswagen begins concrete negotiations for a new multibrand plant in Europe
  • Forward-looking industrial solution for MAN Energy Solutions (ES) and RENK AG to be developed
  • IPO of TRATON SE planned before 2019 summer break

The Supervisory Board and Board of Management of Volkswagen AG took important decisions for the future of the Volkswagen Group today. As part of its electrification offensive the Volkswagen Group is to move forward with setting up a battery cell production facility in Europe under a partnership. To that end, the Supervisory Board approved investments of just under one billion euros at today’s meeting. It is planned to locate a battery cell production facility in Lower Saxony (Salzgitter). It was also decided to begin concrete negotiations on the planned new multibrand plant in Europe with the remaining potential locations. In addition, the Supervisory Board requested the Board of Management to start the process to develop a forward-looking, industrially meaningful solution for MAN Energy Solutions (ES) and RENK AG. The focus lies on opening future-oriented growth perspectives for mechanical engineering in the Group, for example though a joint venture, partnerships, or a full or partial sale. Furthermore, it was decided to prepare an IPO of TRATON SE to be launched before the 2019 summer break, subject to further market developments.