VW is building six “gigafactories” for battery cells in Europe

Salzgitter is just the beginning: Europe’s largest car company has announced big things in battery production – with a “standard battery”, costs should drop dramatically. And not only that.

Volkswagen is already producing battery cells in Salzgitter.

VTogether with its partners, olkswagen wants to build six giant factories in Europe for the production of battery cells by the end of the decade. In this way, the group wants to cover the increasing demand that is created by the accelerated turn to electromobility. “E-mobility has become our core business,” said Volkswagen CEO Herbert Diess during an online event at which the company presented its plans for battery production and infrastructure development by 2030 under the name “Power Day”.

VW has set itself two goals: The newly planned factories are intended to guarantee security of supply. In addition, the company wants to reduce costs with a “standard cell” and thus be able to offer electric cars at lower prices.

“We are reducing the costs and complexity of the battery and at the same time increasing its range and performance,” said Thomas Schmall, Volkswagen’s Chief Technology Officer and responsible for battery production. The new standard battery, which will be installed across all brands in up to 80 percent of all electric cars in the group by 2030, will reduce costs by up to 50 percent, according to the company. “On average, we will reduce the costs for battery systems to well below 100 euros per kilowatt hour.” This will make electric mobility affordable.

Reply to Elon Musk

According to new, ambitious plans by VW, the planned six “gigafactory” are to produce battery cells with a total energy content of 240 gigawatt hours (GWh) per year by 2030. The capacity already planned for the Salzgitter location will be significantly expanded and is expected to produce up to 40 GWh per year. The design and chemistry of the planned standard battery is also to be developed in Salzgitter.

Skellefteå in northern Sweden has already been selected as the second location, here too Volkswagen is cooperating with the Northvolt company. Four more plants are to follow – the last discussion was about possible production at Seat in Spain. “In this way, Volkswagen is actively helping to achieve the goals of the European Union’s Green Deal,” said Schmall.

The development and expansion of our own production capacities for components for electric models is a key issue in the automotive industry. In order to be able to meet the more stringent climate targets, manufacturers have to bring more vehicles with alternative drives into their respective fleets. VW boss Diess said, “we will secure pole position in the race for the best battery in the long term”.

There are currently bottlenecks in the necessary battery cells – and German car companies are heavily dependent on suppliers primarily from China, South Korea and Japan. The investments now full-bodied announced by VW are also seen as a response to the plans of American competitor Tesla. Its boss Elon Musk had announced that Tesla’s new electric car plant near Berlin would also become the world’s largest battery factory.

At the “Power day”, Volkswagen also announced that it would expand the fast charging network for e-cars more quickly. Together with partners, a good 18,000 fast charging points are to be operated in Europe by 2025. Together with the mineral oil company BP, VW is building 8,000 fast charging stations across Europe – most of them in Germany and Great Britain. VW will spend around 400 million euros on the entire charging infrastructure program by 2025.