Volkswagen Group & Northvolt Jointly Invest 450 Million Euros For Battery Operations At Salzgitter

Volkswagen and Northvolt formed a strategic alliance last year for making lithium-ion batteries on a larger scale in Germany. The joint venture seems to be getting a further momentum wherein Volkswagen will develop infrastructure for the joint venture's ‘Northvolt Zwei' factory. This facility will play an essential role in producing lithium-ion battery cells, to leverage synergies at the Salzgitter site which is based on the existing Center of Excellence for Battery Cells. Around 450 million Euros of investment will be made into this project and the JV will initially focus on renting out the factory space.

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The next key strategy decision will be VW's commitment to developing buildings and infrastructure at the plant. The construction work at the site is expected to begin by this year probably towards the end. The battery cell production at the plant is scheduled to commence by early 2024 with an initial production capacity of 16 gigawatt-hours.

Around €450 million will be jointly invested in the project

Thomas Schmall, CEO of Volkswagen Group Components said, “Battery cell production in Salzgitter is an important step for the transformation to e-mobility. We are pooling expertise at the Salzgitter site with production capabilities and the Center of Excellence for Battery Cells, and are therefore driving battery cell development further forward, developing new standards and transferring them directly to the manufacturing process.”

Dr Stefan Sommer, Volkswagen Group Board Member for Components and Procurement and a member of the Northvolt AB Board of Directors said, “We are optimizing the Volkswagen Group's strategic position in the key future field of batteries. In addition to a very secure supply base with external producers, we are also systematically building up further capacities.”

As a part of its electrification strategy, the Volkswagen Group is focusing on the technological expertise in the field of battery cell production. Additionally, the Volkswagen group has opted for a strategic relationship with sever producers for securing its battery supplies across the globe. These suppliers include LG Chem, Samsung, SKI and CATL. Volkswagen is expecting an annual demand of over 150 gigawatt-hours from 2025 in Europe and similar demand from the Asian markets.