The joint venture between the Volkswagen Group and Sweden’s battery manufacturer Northvolt is taking shape. The partners have now decided that the buildings and infrastructure for the planned joint battery cell factory ‘Northvolt Zwei’ will be built by Volkswagen itself.
This should enable the partners to exploit synergies at the Salzgitter location where Volkswagen has its Battery Cell Center of Excellence. Volkswagen has just announced the plans to invest around 450 million euros in the construction of the plant. Once completed, the factory will be rented by the joint venture, according to Group headquarters.
In June 2019, both companies announced that the battery cell production facility in Salzgitter would be set up from 2020 and start at the turn of the year 2023/2024. The target for the first year is a capacity of 16 GWh, “in the following years” Volkswagen and Northvolt are aiming to expand this to 24 GWh.
Volkswagen describes the construction of the buildings and the necessary infrastructure based on a building application submitted in March as the “next strategic decision”. In addition, the Wolfsburg-based company is confirming the previously announced timetable, according to which the construction project is to begin before the end of the current year and production of battery cells at the site is to start at the beginning of 2024.
“Battery cell production in Salzgitter is an important step for the transformation to e-mobility,” says Thomas Schmall, head of the Volkswagen Group Components subsidiary. “We are pooling expertise at the Salzgitter site with production capabilities and the Center of Excellence for Battery Cells, and are therefore driving battery cell development further forward, developing new standards and transferring them directly to the manufacturing process”.
In September, pilot production already started on a small scale in Salzgitter. Overall, however, VW will still have to buy cells from suppliers on a massive scale, despite having its own production facilities: With an average battery capacity of 50 kWh in VW vehicles, the 16 GWh are sufficient for 320,000 electric cars, which is roughly the capacity of the electric car factory in Zwickau. For its plans in Europe and Asia, the Group needs an annual capacity for battery cells of more than 300-gigawatt hours of storage capacity. Volkswagen currently maintains strategic supplier relationships with LG Chem, Samsung and SK Innovation for Europe and CATL for China and Europe. SK Innovation will also supply the battery cells for the US market.