VW Breaks Ground On First Battery Factory In Europe, May Soon Expand To North America

Volkswagen Group began building its first electric vehicle battery factory in Salzgitter, Germany, today. The manufacturer also announced the launch of PowerCo.

The new entity will handle VW Group's global battery operations across the value chain. PowerCo and partners will invest €20 billion in VW's battery business by 2030.

The automaker expects PowerCo to sell that much annually. It expects to employ 20,000 throughout Europe.

Volkswagen CEO Herbert Diess remarked, "Today marks a strategic milestone." Volkswagen's battery cell business is a cornerstone of its NEW AUTO goal to become a leader in sustainable, software-driven mobility.

The factory will be a model for others in Europe. Standardizing cell manufacture will maximize cost and time, easing upscaling. Each plant the automaker constructs will be 100% green and expandable.

“What we've tested millions of times with automotive platforms like MQB and MEB will create the framework for cell production: we'll standardize on European standards and upscale,” said PowerCo CEO Frank Blome. 

The plant will produce enough battery cells to power 500,000 vehicles per year, and VW plans to build six more like it in Europe. Together, they'll produce 240 GWh per year, enough for 3 million vehicles. 

Valencia, Spain will be PowerCo's next battery cell factory. Volkswagen is considering three more European sites and North American options.

Thomas Schmall, VW's head of technology and PowerCo's chairman, said the company will become a global battery player. "We'll conduct all related tasks in-house in the future to obtain a competitive advantage in e-mobility. We've assembled a wonderful team.”