VW’s electrification strategy means around a quarter of the vehicles it sells in 2025 will be powered by electricity © Volkswagen
VW’s electrification strategy means around a quarter of the vehicles it sells in 2025 will be powered by electricity © Volkswagen

VW to build €1bn battery factory

Will Green is news editor of Supply Management
15 May 2019

Volkswagen has agreed to invest almost €1bn to build its own battery factory in Germany.

The carmaker said it would be launching almost 70 new electric models over the next 10 years and this would increase demand for batteries to more than 300 gigawatt hours a year.

As part of its battery strategy, the company has also signed a memorandum of understanding with China-based Ganfeng Lithium to secure the supply lithium, the main component in batteries, for the next 10 years.

VW’s electrification strategy means around a quarter of the vehicles it sells in 2025, around 22m, will be powered by electricity.

VW supervisory board chairman Hans Dieter Pötsch said: “As part of our comprehensive electrification offensive we plan to secure our battery capacities through strategic partnerships.

“At the same time, we wish to expand our production capacities in Europe to support our growth plans. Given the ever greater complexity of our industry and the related challenges, it is essential to focus on our core business.”

The carmaker said it was working to reduce the amount of cobalt in batteries, from 12-14% currently to 5% over the next five years. It is also working to produce batteries free of cobalt, which has been associated with conflict minerals.

VW has also teamed up with other firms to form the European Battery Union to drive battery research.

“Under the leadership of the Volkswagen Group and the Swedish battery manufacturer Northvolt, the joint research activities will focus on the battery’s entire value chain – from raw materials to cell technology to recycling. The prime objective is to build far more comprehensive expertise to underpin industrialisation of battery cell production,” said VW.

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