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Volkswagen Forms European Company for Automobile Batteries Production

Yusuf Balogun
Yusuf Balogun
Yusuf is a law graduate and freelance journalist with a keen interest in tech reporting.

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Today, the German multinational automotive manufacturing corporation, Volkswagen, has officially announced that it has formed a European firm to unify activities across the battery value chain, from raw material processing to the development of a unified Volkswagen battery to the management of European gigafactories.

The company models based on reusing wasted automobile batteries and recycling the precious raw materials they contain will be part of the company’s scope. As a result, the Group is developing an efficient and future-proof architecture for the constantly expanding battery industry.

The Volkswagen Group is seeking to become the world’s leading maker of electric vehicles as part of its NEW AUTO strategy. To that purpose, it’s growing its battery-related activities and establishing them as a key competency.

Volkswagen plans to build six gigafactories in Europe to meet the company’s expanding demand for battery cells. In 2025, Salzgitter will begin producing battery cells.

For the Volkswagen Group’s volume business, the gigafactory in Lower Saxony will create unified battery cells. The factory’s initial capacity is slated to be 20-gigawatt hours, however, this is expected to be increased to 40-gigawatt hours in the future.

The Volkswagen Group is spending extensively on developing battery cell production in Salzgitter based on the current planning round. Up until the start of production, €2 billion has been set aside for the building and operation of the Salzgitter gigafactory.

In the future, the production of battery cells in Salzgitter is planned to employ around 2,500 people. These individuals will primarily be Salzgitter engine factory employees who will be retrained to fill these new responsibilities. The Volkswagen Group’s battery center will be located in Salzgitter, Lower Saxony, and will bring together development, planning, and manufacturing management under one roof. Additional gigafactories are expected to be built in Spain and Eastern Europe.

In the first half of 2022, the exact locations for gigafactories 3 and 4 will be determined. By 2030, Volkswagen plans to build two more battery cell facilities in Europe.

This will produce battery cells for the premium automotive segment starting in 2023. In the area of premium battery cells, Northvolt already has a relationship with the Volkswagen Group.

The Volkswagen Group is pursuing what is arguably the most comprehensive electrified strategy in the world of automobiles. The Group will invest roughly €52 billion in the research and production of new electric vehicles over the next five years.

The development of new commercial fields such as batteries, charging, and energy is also covered under the NEW AUTO plan. In addition, the Group is developing dedicated technology platforms to facilitate cross-brand synergies, such as the modular electric drive matrix MEB and an SSP platform, both of which are expected to debut in 2026.

Speaking about the production components of the batteries, Thomas Schmall, member of the Board of Management for technology at Volkswagen AG and CEO of Volkswagen Group Components, said:

“We want to offer our customers powerful, inexpensive, and sustainable vehicle batteries, which means we need to be active at all stages of the battery value chain that are critical for success.” – CEO of Volkswagen

“We are now bundling our power in Salzgitter, with the aim of encouraging innovation and securing the support of the best partners for our new company going forward. We already have a strong battery team in Salzgitter made up of 500 employees from 24 countries – and we are continuing to strengthen this team at the leadership level.” He added.


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