Volkswagen Starts Own Battery Cell Production in Germany

German automaker Volkswagen officially started its own battery cell production in Germany, with production beginning on Wednesday at the first plant of its subsidiary PowerCo in Salzgitter, built on the site of the existing engine plant of the group, DPA reported. More than 1 billion euros have been invested in the project so far, and construction began in July 2022.

Chief Executive Officer Oliver Blume described the new enterprise as “a signal for Europe” and a key element of the group's strategy, emphasizing that Volkswagen is the first European car manufacturer with its own development and production of battery cells. The initial capacity is limited, but a rapid increase to 60–70 thousand cells per day is expected, with a target annual capacity of 20 gigawatt-hours – enough for around 250 thousand electric vehicles.

The cells from Salzgitter will be used for the first time in the electric models VW ID Polo and Cupra Raval, planned for release in Spain in 2026. Volkswagen intends to replicate the plant model in two more locations – in Valencia (Spain) and in St. Thomas (Canada), with production starting in 2026 and 2027 respectively, DPA reports.

The management of PowerCo notes that the pace of development depends on the growth of electromobility, and according to the company, three battery plants are sufficient at this stage. Meanwhile, the European Commission has softened its position on the phasing out of internal combustion engines after 2035, but this does not change the company's views on the future of electric cars, DPA reported.