VW, partners to invest over $20 billion in car battery business

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SALZGITTER, Germany — Volkswagen said on Thursday it would invest more than 20 billion euros ($20.38 billion) in a battery cell company with partners, creating 20,000 jobs and achieving annual sales of more than 20 billion euros by 2030, while it is looking for leadership in the growing market.

The PowerCo unit will manage VW’s global battery production and research, from raw material extraction to recycling, and projects including energy storage systems, the carmaker said at the groundbreaking ceremony for its first European battery cell factory.

“Today is a good day for the auto industry in Germany,” Chancellor Olaf Scholz said in a statement ahead of his speech at the ceremony.

Volkswagen has repeatedly said that producing enough batteries to power all cars is by far the biggest challenge of the transition to electric vehicles, and has rolled out a plan to build factories with a combined capacity of 240 gigawatt hours (GWh) by 2030. .

This includes six plants in Europe, of which Salzgitter is the “blueprint” for VW’s future standardized production facilities, and two in North America. Salzgitter alone will have the capacity to build 40 GWh, enough batteries in a year to power 500,000 vehicles.

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“What we’ve proven a million times with Volkswagen’s vehicle platforms: standardization and scaling provides the highest quality speed and cost optimization,” said PowerCo Chief Executive Frank Blome.

At the ceremony, Volkswagen also presented the standardized prismatic battery cell it announced in 2021, which will be used in up to 80% of the group’s models.