Varta pauses EV battery factory construction

Varta has put the construction of a factory for electric car battery cells on hold for the time being for cost reasons, as the company announced in its current annual report. The construction of the new factory for the V4Drive battery is to be continued only after binding customer commitments.

However, the operation of the pilot plant will continue as planned and will provide the cells to fulfil the contract with a premium car manufacturer, the company said. The first customer is reportedly Porsche.

Varta had presented the round cell V4Drive in 21700 format as a booster battery in April 2021 and announced larger round cells for BEVs six months later. Pilot production of the V4Drive cells in 21700 format started at the end of 2021, with mass production scheduled to begin in 2023 with a production capacity of at least 2 GWh. While pilot production is now expected to ramp up further, the move to 2 GWh is unlikely to happen as planned.

Overall, the environment for Varta has apparently deteriorated recently. On the one hand, rising energy and raw material prices and supply bottlenecks for semiconductors continue to weigh on the company, and on the other hand, customer demand is falling in some areas. The company has therefore launched an “action package to reduce costs, with temporary capacity adjustments in production and measures in the personnel area”. In the CoinPower division, which is particularly affected, Varta is temporarily implementing short-time work at the Nördlingen production site.

“The situation for the company remains challenging in what is a tense economic environment for us all,” explains Dr Markus Hackstein, speaker of the Executive Board of Varta, adding: “Comprehensive solution concepts should allow VARTA to be correctly positioned to exploit key future markets. A clear focus is the growth market of energy storage systems. In this segment, we are positioning the company strongly, with the aim of meeting the sustained high demand.”

In September 2022, Varta had announced that it would bundle its business areas for electromobility and battery packs in a separate company called V4Drive SE. What effects the paused construction plans for the new company will have is not outlined in the annual report.


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