As it prepares to roll out 70 EVs by 2028, the Volkswagen Group is forging supply deals and establishing new plants to ensure it has enough batteries to power all of the cars.
In Europe, VW has formed a joint venture with Swedish startup Northvolt to manufacture batteries at two new sites.
The first site is a new plant under construction in the Swedish town of Skelleftea, which is scheduled to become operational in 2021. The second site will be located in Salzgitter, Germany, where VW already has a battery R&D lab.
On Monday, VW announced it would construct the new plant in Salzgitter at a cost of 450 million euros (approximately $487 million) and then rent it to the joint venture with Northvolt. The Salzgitter plant is scheduled to be operational in 2024.
“We are optimizing the Volkswagen Group’s strategic position in the key future field of batteries,” said Stefan Sommer, VW's head of procurement. “In addition to a very secure supply base with external producers, we are also systematically building up further capacities.”
VW currently sources batteries from suppliers, and this will continue for some time. The automaker predicts that demand for batteries in Europe alone will be more than 150 million kilowatt-hours annually by as early as 2025. The new plant in Salzgitter will only be able to supply around 16 million kwh annually. VW's current suppliers include LG Chem, Samsung, SK Innovation, and CATL. SK Innovation is the supplier VW will tap for batteries for EVs manufactured in the United States. The first of these will be the Volkswagen ID 4 crossover SUV starting production at a plant in Chattanooga, Tennessee, in 2022.