Volkswagen Group Creates European Battery Company

It will consolidate the company's battery-related activities along the entire value chain.

Volkswagen Group creates European company for its battery business

Mark Kane

By: Mark Kane

Dec 13, 2021 at 5:06pm ET

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Volkswagen Group announced that it will consolidate its battery-related activities into a new European company that will cover the entire value chain: from processing raw materials to developing a unified Volkswagen battery cell to managing the European gigafactories.

Let's recall that the German manufacturer announced six battery gigafactories in Europe, a new unified battery cell (currently under development) and other activities like reusing discarded car batteries (second life projects) and recycling.

"The Group is thus creating efficient and future-proof structures for the rapidly growing battery business. As part of its NEW AUTO strategy, the Volkswagen Group is aiming to become the world’s leading manufacturer of electric vehicles. To this end, it is expanding its battery-related activities and making these into one of its core competencies."

The decision includes also new international appointments. One of the most interesting things is that Soonho Ahn, who recently moved from Apple, "will take on a leading role in the development of battery cells:"

"Under the management of battery boss Frank Blome, Soonho Ahn will take on a leading role in the development of battery cells. Following appointments at LG and Samsung, Ahn’s most recent post was as Global Head of Battery Development at Apple. Kai Alexander Müller of Barclays Investment Bank,London, will likewise make the switch to Salzgitter, where he will contribute his financial experience in the capital market and in equity research."

6 battery gigafactories in Europe (240 GWh/year)

Volkswagen Group intends to have 6 battery gigafactories in Europe by 2030, with a combined output of 240 GWh annually (40 GWh per gigafactory, on average).

The key project for the group right now is the Salzgitter site, which not only will cost some €2 billion, but it's the first plant that will produce the all-new unified battery cells. Volkswagen Group even says that it will make Salzgitter its European battery hub.

Here is what we know:

Northvolt Ett plant (Northvolt) in Skellefteå in northern Sweden - more info here
(Volkswagen holds around 20% stake in Northvolt)
set to start in 2023
product: battery cells for the premium automotive segment
target volume: up to 40 GWh/year (out of 60 GWh planned by Northvolt for all customers)
Salzgitter, Lower Saxony, Germany
set to start in 2025
product: unified battery cells for the Volkswagen Group’s volume segment
20 GWh/year initially, 40 GWh/year at a later stage
"€2 billion has been earmarked for the construction and operation of the Salzgitter gigafactory up to the start of production"
expected more than 2,500 jobs
pilot recycling activities were reported in January 2021
Spain (plan) - location to be decided in the H1 2022
Eastern Europe (plan) - location to be decided in the H1 2022
gigafactory #5 - no info
gigafactory #6 - no info

The all-new Scalable Systems Platform (SSP) that will use the new unified cells is expected to be launched in 2026.

Globally, Volkswagen Group intends to invest around €52 billion in the development and production of new electric vehicles over the next five years.

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Thomas Schmall, member of the Board of Management for technology at Volkswagen AG and CEO of Volkswagen Group Components, and thus responsible for batteries, charging and energy as well as for the in-house production of components, says the following:

“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. 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.”