Volkswagen’s Chinese battery partner Gotion High-Tech has announced plans to invest a total of 12 billion yuan (1.55 billion euros) in the construction of battery recycling and raw material production facilities for lithium batteries in the Chinese city of Hefei.
The entire project is expected to be completed within 24 months of the start of construction. An agreement to this effect was signed earlier this week with the local government of Feidong District in the megacity of Hefei. Hefei is located nearly 450 kilometres west of Shanghai in the interior.
Gotion says that this investment is aimed at improving both control over products and their upstream raw materials, as well as costs. In doing so, the company aims to “consolidate its market position in the lithium battery industry.”
The company established two wholly-owned subsidiaries earlier this month: Hefei Gotion Recycling Technology will be dedicated to battery recycling and reuse, and Hefei Gotion New Material Technology with the development, production and sales of anode materials. Both subsidiaries were provided with a registered capital of 50 million yuan (6.46 million euros).
In autum 2020, Gotion High-Tech had already announced an expansion of production capacity for its cells, and then at the end of January 2021, the Volkswagen partner (VW had acquired a 26 per cent stake in July 2020) presented a battery cell with LFP chemistry that has an energy density of 210 Wh/kg.
The city of Hefei and the province of Anhui are very supportive of electric cars. In addition to Gotion, the VW joint venture with JAC, now renamed Volkswagen Anhui, is also located there. In addition, both the city and the province have supported the struggling Chinese startup Nio with credit lines worth billions in return, Nio is to build factories and research centres in Hefei.