Volkswagen Enters Global Battery Business with “PowerCo”

Salzgitter – Volkswagen is continuing its e-mobility strategy with the construction of its first cell factory in Salzgitter today. This new production facility will start operating in 2025 and will play a key role in the company’s battery offensive. With immediate effect, responsibility for global battery business is to be held by the newly created company “PowerCo”. In addition to cell production, the new company will be responsible for activities along the entire battery value chain. Up to 2030, PowerCo is to invest more than €20 billion together with partners in the development of the business area, to generate annual sales in excess of €20 billion and to employ up to 20,000 people in Europe alone.

German Chancellor Olaf Scholz said with regard to the groundbreaking ceremony: “Today is a good day for the automotive industry in Germany and Europe. 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.“

Herbert Diess, CEO of Volkswagen AG, said: “Today we are not only laying a foundation stone but also marking a strategic milestone. The battery cell business is one of the cornerstones of our NEW AUTO strategy which will make Volkswagen a leading provider of the sustainable, software-driven mobility of tomorrow. Establishing our own cell factory is a megaproject in technical and economic terms. It shows that we are bringing the leading-edge technology of the future to Germany!”

PowerCo bundles global battery activities

The Volkswagen Group is consolidating its global battery operations under the European company PowerCo. From Salzgitter, the company will manage international factory operations, cell technology development, vertical integration of the value chain, and machinery and equipment supply to factories. Looking ahead, PowerCo is also planning additional products such as large-scale storage systems for the energy grid. The next cell factory after Salzgitter will be established in Valencia, with three more planned for Europe. In addition to Europe, PowerCo is also exploring the possibility of gigafactories in North America.

PowerCo is to be managed by CEO Frank Blome and Board Members Sebastian Wolf (Chief Operations Officer), Kai Alexander Müller (Chief Financial Officer), Soonho Ahn (Chief Technology Officer), Jörg Teichmann (Chief Purchasing Officer) and Sebastian Krapoth (Chief Human Resources Officer).

Standard factory and unified cell enable rapid global rollout

On the occasion of the groundbreaking ceremony, the Group presented the concept of the standard factory for the first time; Salzgitter is to be a blueprint for cell factories throughout Europe and will set new standards in terms of sustainability and innovation. “What we have put to the test millions of times over with vehicle platforms such as the MQB and MEB will also lay the foundation for establishing cell production: we will be standardizing on the basis of European standards and upscaling. This way, we will combine speed and cost optimization with the highest quality levels“, said PowerCo CEO Frank Blome. Standardization will not only cover equipment, buildings and infrastructure but also products, processes and IT. This way, factories that can rapidly be converted for further product and production innovations will be created. Each factory will be operated 100 percent on electricity from regenerative sources and will be designed for future closed-loop recycling.

Volkswagen has unveiled its new prismatic unified cell, which allows for the flexible use of different cell chemistries. This will be used in up to 80 percent of all Group models from 2025 onwards. The plant is expected to have an annual capacity of 40 GWh by 2030 – enough for around 500,000 electric vehicles. With six-cell factories throughout Europe, the Volkswagen Group intends to produce a total volume of 240 GWh by 2030. The new unified cell is expected to reduce battery costs by up to 50 percent.


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