VW is building its own network of battery cell factories
Posted On March 15, 2021
With its own network of battery cell factories, Volkswagen wants to make electric vehicles cheaper and thus counter the declarations of war by US rival Tesla. The largest car company in Europe announced the establishment of an internal cell production facility at at least six locations. The Wolfsburg-based company works with companies like Northvolt from Sweden. The partners have already started to set up a first production facility in Salzgitter in the German state of Lower Saxony.
This will be expanded and will become the sole responsibility of VW. A location has also been set in Skellefteå in northern Sweden. Four more will follow by 2030. VW works council chief Bernd Osterloh and Lower Saxony’s Prime Minister Stephan Weil – both on the supervisory board of the largest German industrial company – are calling for a second cell plant for the Federal Republic.
Volkswagen hopes to kill several birds with one stone. On the one hand, own factories for battery components are supposed to secure the supply. Recently, similar to electronic chips, there were major delivery bottlenecks, and Europe’s automotive industry is still dependent on suppliers from Asia. Above all, however, the economies of scale of self-controlled cell production should lower costs – and thus the prices of electric cars for customers.
That should also be seen as an attack on Tesla. Tesla boss Elon Musk had declared that his new factory in Grünheide near Berlin should also become the world’s largest battery factory. In addition, the Americans want to offer more models in the mid-range and compact class in the future, in other words the classic “volume segment” from Volkswagen.
According to current plans, battery cells with a total energy content of 240 gigawatt hours (GWh) per year could be produced in the six VW “gigafactories” by 2030. That would be an average of 40 GWh per location, which means an increase for Salzgitter. Industry experts assume that this will require investments of twelve billion euros
As head of the state government, Weil declared: “I am convinced that the coast of Lower Saxony would be the best choice for at least one of the other factories announced by Volkswagen.” Because there is enough wind energy there – production should be operated with green electricity in order to work with as little CO2 as possible. A possible production at Seat in Spain was also recently discussed. Officially, it is said that further “locations and partners are currently being examined”.
The Greens gave praise to the steps that had been decided. “VW is assuming responsibility for Germany and Europe as an automotive location,” said group vice-president Oliver Krischer. “This is how jobs are saved – not by conjuring up nonsensical synthetic fuels for the internal combustion engine, as one hears from the Ministry of Transport.” The VW batteries are also to be recycled to a large extent.
The development and expansion of own capacities for components for e-models is a key issue in the industry. In order to be able to meet the EU’s more stringent climate targets, manufacturers must bring more vehicles with alternative drives into their fleets.
“By 2030, a uniform cell format will cover 80 percent of all use cases in our group,” said CEO Herbert Diess. “That will help to radically reduce battery costs. And of course that means more affordable vehicles.” According to VW technical director Thomas Schmall, “specific solutions” are required for the remaining 20 percent. Northvolt should therefore also build high-performance batteries for more expensive cars.
With the “unit cell” in particular, VW is aiming at width. The system is scheduled to start in 2023 and be manufactured in Salzgitter in the mass segment from 2025. With it, the variety of variants will decrease, which will reduce battery costs – for entry-level models “gradually by up to 50 percent and in the volume segment by up to 30 percent”.
Osterloh recently emphasized that with uniform technology and corresponding savings, Tesla is currently still one step ahead: “The key to the question of whether synergies are successful is a correct standard cell for the batteries.” At the turn of the year, VW had “around two dozen more cell variants than Tesla.
In cooperation with energy and mineral oil companies such as BP / Aral in Germany or Iberdrola in Spain, Volkswagen also wants to expand the charging network for e-cars in Europe. A good 18,000 fast charging points are to be operated by 2025. “We make sure that charging is just as easy as refueling,” said Diess. The joint initiative should cover a third of the need for public charging stations on the home continent by 2025.
Further energy services are also planned. E-cars should be able to be used as mobile electricity storage at home. The vehicles then take in excess electricity from their own solar system and later feed it back into the domestic grid.
In connection with the expansion of cell production, there could be a long-term change in technology: In a few years’ time, VW intends to increasingly rely on solid-state batteries in which the charge is no longer transported by a liquid carrier material. With certain designs, the cells can be lighter, which saves range. A higher energy density and faster charging are also conceivable. The group has been working with the Californian company Quantumscape for a long time in solids technology.