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VW to build EV battery pack facility in China as it targets 40% NEV fleet by 2030

Thu, 10/07/2021 - 10:23 -- Paul Crompton

Work on an electric vehicle pack manufacturing plant has begun in China by Volkswagen Group China— the first battery system plant wholly owned by the Group in China.

The production factory in Hefei, Anhui province, will have an initial annual capacity of 150,000 to 180,000 high-voltage battery systems for Volkswagen Anhui’s all-electric vehicles. 

The 45,000 square meters plant will be built next to the production facilities of Volkswagen Anhui— the joint venture formerly named JAC Volkswagen Automotive before Volkswagen Group increased its stake in the company to 75%. 

Volkswagen Group China is investing more than €140 million ($160 million) in the new VW Anhui Components Company plant until 2025.

Start of production is scheduled to commence in the second half of 2023.

Volkswagen Group China aims to ensure more than 40% of it fleet are ‘new energy vehicles’ by 2030.

Dr. Stephan Wöllenstein, CEO Volkswagen Group China, said: “With a significant increase of battery-electric vehicles (BEVs) in the future, we need to focus on keeping key components like battery systems in our own value chain, allowing us to leverage Group-wide synergies and innovations.”

The development and production of battery systems is a crucial step on the way to Volkswagen achieving end-to end responsibility for the battery. 

Its global strategy includes vertical integration in the raw material market via building battery plants and cell factories in addition to incorporating second-life solutions and recycling.

The company is building battery manufacturing facilities in China, Czech Republic and the US (Tennessee), with its factory in Braunschweig, Germany, ready to produce up to 500,000 battery systems a year.

The new plant will leverage existing synergies with the Group’s wholly owned battery plants and workshops in Braunschweig and Tianjin, China, as well as enhance ties and synergies with the battery plants of Volkswagen Group’s Chinese joint ventures.

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