Volkswagen to invest 450 million euros for lithium-ion battery cells production

The joint venture between the Volkswagen Group and the Swedish battery manufacturer Northvolt AB continues to gain momentum. Specifically, it was decided that the building and infrastructure of the joint “Northvolt Zwei” factory for the production of lithium-ion battery cells would be built by Volkswagen itself in order to exploit synergies at the Salzgitter location based on the existing Center of Excellence for Battery Cells. The investments for this amount to around 450 million euros. The plant is then rented from the joint venture. The production of battery cells should start there at the beginning of 2024, and the production capacity should initially be 16 gigawatt hours.


“We are strategically optimally aligning the Volkswagen Group with the key future topic of batteries,” says Dr. Stefan Sommer, Volkswagen Group board member for components and procurement, and member of the supervisory board of Northvolt AB. “In addition to very good coverage by external suppliers, we are consistently building up additional capacities.”

Volkswagen and Northvolt founded a joint venture in September 2019 to prepare the series production of lithium-ion batteries in Germany. The construction of buildings and infrastructure by Volkswagen is the next strategic direction. The construction project at the site is scheduled to start this year.

“Battery cell production in Salzgitter is an important step in the transformation to e-mobility,” says Thomas Schmall, CEO of Volkswagen Group Components. “With the production and the Center of Excellence Battery Cell, we bundle competencies at the Salzgitter location and thus drive the further development of the battery cells, develop new standards and can transfer them directly to production.”

As part of its electrification strategy, the Volkswagen Group is building up further technological expertise in the field of battery cell production. In addition, the Group maintains several strategic supplier relationships to secure its battery supply in all regions of the world. Today these are LG Chem, Samsung and SKI for Europe as well as CATL for China and Europe. SKI will also supply the battery cells for the US market. For Europe alone, Volkswagen anticipates an annual demand of more than 150 gigawatt hours from 2025.

Author: Nabeel K

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