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VW breaks ground on first EV cell “gigafactory,” starts PowerCo battery business

Volkswagen formally broke floor Thursday on what it’s nicknaming SalzGiga—VW’s battery manufacturing facility at Salzgitter, Germany, that may function a hub for international battery actions and vertical integration of the battery provide chain. 

With that, VW additionally formalized the identify of the separate startup, known as PowerCo, that may arrange and oversee these factories. 

Salzgitter can be a blueprint and start line for what VW phrases a “international battery offensive,” together with six cell factories in Europe plus “the prospect of additional factories in North America within the close to future.”

Volkswagen Salzgitter EV cell manufacturing facility

This facility alone will assist greater than 20,000 “future-proof” jobs, in keeping with VW, and can be supported by a provider park. Salzgitter will ramp as much as 40 GWh of capability—sufficient for about 500,000 EVs—whereas PowerCo’s plan for Europe consists of six further factories and a complete capability of 240 GWh by 2030. 

SalzGiga will produce VW’s new prismatic unified cell format—revealed at VW Energy Day in March 2021—that may ultimately be put in in 80% of the EVs from the VW Group by the tip of the last decade. It is going to be used beginning in 2025. With the Energy Day announcement, VW pivoted to viewing battery cells fairly than the pack itself as a core competency, aiming for a Cell2Pack technique wherein cells are positioned instantly within the pack as an alternative of being grouped into modules.

VW Power Day  -  battery mix

VW Energy Day – battery combine

VW Power Day  -  battery types

VW Energy Day – battery sorts

VW Power Day  -  battery types

VW Energy Day – battery sorts

A part of VW’s intention with PowerCo is to cut back battery prices by as much as 50%. To get there, PowerCo will make investments greater than $20.4 billion (20 billion euros), with long-term goals to attain greater than that quantity in annual gross sales. 

The brand new cell format, which is headed into Volkswagen’s next-generation Scalable Techniques Platform (SSP) for electrical autos, can be deployed throughout VW Group’s manufacturers, and is scheduled to debut in a mannequin as a result of launch in 2026. The cell can be made with “inexperienced” electrical energy, VW says, and the targeted services and standardized format will assist obtain a recycling fee of greater than 90% as a part of the uncooked supplies cycle. All factories can be outfitted with the identical standardized tools.

Officers known as PowerCo one of the vital essential startups within the historical past of Germany. Volkswagen might have large plans to speed up previous Tesla to develop into the world’s primary maker of electrical autos, however to be aggressive it must deliver cell manufacturing to its residence turf. As CEO Herbert Diess underscored, all of the current supply-chain points have positioned urgency on the necessity for the corporate, and Germany, to cut back dependence on Asia, not only for cells however for uncooked supplies as properly. 

VW Salzgitter cell facility

VW Salzgitter cell facility

The manufacturing facility is being constructed subsequent to a facility that till lately constructed engines. In accordance with VW, 1,000 staff have already been educated for brand spanking new actions surrounding batteries. Salzgitter has been the positioning of a pilot line for battery cell manufacturing and cell-making experience since 2019. 

Germany and the EU perceive the significance of preserving the availability chain inside. Along with the European Battery Alliance established by the European Fee in 2017, a European Battery Union launched in 2019 goals to conduct joint analysis and assist consolidate uncooked supplies and recycling, whereas specializing in German auto prowess. 

That mentioned, the push to ramp up the battery provide chain in all features cannot come quickly sufficient. In 2017, VW’s chief of analysis and growth anticipated that the equal of 40 Tesla gigafactories is likely to be wanted to feed the complete trade by 2025, and to stave off a scarcity of batteries to fulfill the volumes VW then anticipated. 

Now that VW has at the least one gigafactory of its personal deliberate for that timeframe, PowerCo will successfully shoulder VW’s ambition and decide how shortly it may possibly construct its energy base.

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