Volkswagen has officially kicked off the launch of its new battery company, PowerCo, by breaking ground for its factory in Salzgitter, Germany.
The new facility, along with five others planned for Europe, will be responsible for the German automaker’s global battery business and managing the value chain – from sourcing raw materials to selling the finished product, in addition to recycling.
“Today is a good day for the automotive industry in Germany and Europe,” said the German Chancellor Olaf Scholz. “Volkswagen is showing how the future of sustainable, climate-compatible mobility could look. Together, we are laying the foundation for shaping this future to a significant extent in Salzgitter.”
The new chapter in Volkswagen’s history, PowerCo, will oversee business development in Salzgitter and expand production to new sites across Europe and North America. Volkswagen plans to invest €20 billion in the next eight years to ramp up its production worldwide and become a global EV leader.
Battery cell production will begin in 2025 at the Salzgitter factory, which will serve as the standardized model for future factories, Volkswagen said. PowerCo will locate its second cell factory in Valencia, Spain and is considering expanding further to North America.
“Establishing our own cell factory is a megaproject in technical and economic terms,” said Herbert Diess, CEO of Volkswagen. “It shows that we are bringing the leading-edge technology of the future to Germany.”
The Salzgitter plant is expected to supply about 500,000 EVs. Together, the new factories planned for Europe could supply roughly 3 million EVs.