Vehicle OEM Volkswagen is investing €450 ($487million) to construct the buildings and infrastructure of a European lithium-ion gigafactory it is developing with its joint venture partner Northvolt.
Construction of the Northvolt Zwei factory in Salzgitter, Germany— close to VW’s existing Center of Excellence for Battery Cells— is due to begin by the close of the year with cell production scheduled for early 2024.
Once built, the joint venture will rent the factory space where it plans to begin operations at an initial production capacity of 16GWh.
In September 2019, Volkswagen and Northvolt established a joint venture to prepare for the large-scale production of lithium-ion batteries in Germany.
Thomas Schmall, CEO of Volkswagen Group Components, said: “We are pooling expertise at the Salzgitter site with production capabilities and the Center of Excellence for Battery Cells, and are therefore driving battery cell development further forward, developing new standards and transferring them direct to the manufacturing process.”
The Volkswagen Group is amassing technological expertise in the field of battery cell production as part of its electrification strategy.
The group maintains strategic relations with several producers including: LG Chem, Samsung and SKI for Europe as well as CATL for China and Europe. In addition, SKI will also supply battery cells for the US market.
In Europe alone, Volkswagen expects annual demand of more than 150GWh from 2025, with demand in Asia at a similar level.