Volkswagen And Bosch Explore Battery Manufacturing Joint Venture

The two partners potentially could establish a new battery equipment solution provider for gigafactories.

Volkswagen and Bosch want to industrialise manufacturing processes for battery cells

Mark Kane

By: Mark Kane

Jan 20, 2022 at 8:00am ET

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Volkswagen Group and Bosch announced that they have signed a memorandum of understanding to explore the establishment of a European battery equipment solution provider.

The idea is to potentially create a new company that would "supply integrated battery production systems as well as on-site ramp-up and maintenance support for battery cell and system manufacturers."

Obviously, Volkswagen Group is interested in such a project because its own strategy includes the in-house development of an all-new "unified cell" (in partnership with Gotion High-Tech), for the upcoming Scalable Systems Platform (SSP), and production of the cells at six battery gigafactories in Europe.

Volkswagen Group needs a manufacturing partner for its battery-related ambitions. As we understand, if there would be an opportunity to develop a universal solution, also for other gigafactories (other battery manufacturers), it would be an interesting business opportunity.

According to estimates stated in the press release, in Europe alone, the industry-wide demand for batteries will reach 700 GWh per year by 2030.

"The companies are aiming for cost and technology leadership in the industrialisation of battery technology and the volume production of sustainable, cutting-edge batteries. Through the “local for local” production approach, this will also be a step towards the objective of carbon-neutral mobility. In Europe alone, the Volkswagen Group plans to build six cell factories by 2030."

"For both partners, this alliance is a further step towards playing leading roles in the world of e-mobility. The partnership will draw on complementary areas of expertise: While Volkswagen is an accomplished at-scale automaker and is on its way to becoming a major battery cell manufacturer, Bosch has excellent know-how in factory automation and systems integration."

For now, it's just an option. If the two partners agree on the business, the new company might be established by the end of 2022.

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Volkswagen Scalable Systems Platform (SSP)

Thomas Schmall, Member of the Board of Management of Volkswagen Group in charge of Technology and CEO of Volkswagen Group Components, commented:

“Europe has the unique chance to become a global battery powerhouse in the years to come. There is a strong and growing demand for all aspects of battery production, including the equipment of new gigafactories. Volkswagen and Bosch will explore opportunities to develop and shape this novel, multibillion-euro industry in Europe. Our decision to actively engage in the vertical integration of the battery-making value chain will tap considerable new profit pools. Setting out to establish a fully localised European supply chain for e-mobility made in Europe certainly marks a rare opportunity in business history.”

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Rolf Najork, Member of the Board of Management of Robert Bosch Group and Chairman of the Executive Board of Bosch Rexroth, stated:

“Together with Volkswagen, we seek a path to industrialise production processes for battery cells with standardised equipment. We have the best prerequisites for this: Bosch is not only the world's biggest automotive supplier, but also one of the leading suppliers of factory equipment. We understand how battery technology works, and know how to manufacture it. With more than 135 years of automotive experience and our proven industrialisation expertise, we want to serve the growing demand for batteries. European industry has the potential to become a technology driver for the ecological transformation of the economy.”