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VW sets up ‘PowerCo’ battery company; to set up 40 GWh cell factory in Germany

German Chancellor Olaf Scholz (third from right) and Herbert Diess, Chairman of the Board of Management of Volkswagen AG (fourth from the left) at the ceremonial start of construction for the cell factory in Salzgitter.

Volkswagen Group has announced its entry into the global battery business with the launch of a new battery company 'PowerCo' and start of construction of first cell factory in Salzgitter, Germany. With an investment of more than € 20 billion, the new company will be responsible for the group's activities along the entire battery value chain.

The company has said that 'PowerCo' will manage international factory operations, further development of cell technology, vertical integration of the value chain and the supply of machinery and equipment to the factories with immediate effect.

Speaking on the development, Herbert Diess, CEO of Volkswagen AG, said, "Today we are not only laying a foundation stone but also marking a strategic milestone. The battery cell business is one of the cornerstones of our NEW AUTO strategy which will make VW a leading provider of the sustainable, software-driven mobility of tomorrow".

He further added that establishing VW's own cell factory is a megaproject in technical and economic terms that shows that the company is bringing the leading-edge technology of the future to Germany.

Following Salzgitter, the next cell factory is to be established at Valencia. VW claims that sites are currently being identified for three further cell factories in Europe. In addition to Europe, PowerCo is also already exploring the possibility of further gigafactories in North America, according to the press statement.

VW has already unveiled its prismatic unified cell last year. This allows the flexible use of a raft of different cell chemistries, and will be used in up to 80 percent of all Group models, according to the company. In the coming years, apart from EV batteries, other products such as major storage systems for the energy grid are also planned.

At Salzgitter, unified cells for the volume segment are to be produced from 2025 onwards. The plant is to reach an annual capacity of 40 GWh, enough to equip about 500,000 electric vehicles. By 2030, the Volkswagen Group intends to operate six cell factories with a total volume of 240 GWh throughout Europe together with partners. 

Author : Dhiyanesh Ravichandran
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