VW establishes a European Company (SE) for battery business

In order to meet the increasing cell demand of the Volkswagen Group, the company plans to set up six factories. Production of the “unified cells” for the volume segment is expected to start in Salzgitter as early as 2025. In the first expansion stage, the factory is expected to produce 20 gigawatt hours of annual capacity, with a later expansion to 40 GWh planned. “We want to offer our customers powerful, affordable, and sustainable vehicle batteries – and to do that, we aim to cover all critical stages of the battery value chain,” says Thomas Schmall, Member of the Board of Management of Volkswagen AG, responsible for Technology and CEO of Volkswagen Group Components, adding:

“Now we are bundling our power in Salzgitter to drive innovation and attract the best partners for our new company in the future. We already have a strong battery team with over 500 colleagues from 24 nations in Salzgitter – and we are continuing to strengthen it at the leadership level as well.”

The new SE is expected to further drive the battery business: The tasks of the new company will encompass all activities from raw material processing to the development of the Volkswagen unified cell to the management of European gigafactories. Additionally, new business models around the reuse of depleted batteries and the recycling of raw materials are also being considered.

Interesting Personnel - with Former Apple Employees

The personnel are also interesting: VW has brought in Soonho Ahn. Under the leadership of Battery Chief Frank Blome, Soonho Ahn will play a leading role in the development of the battery cell. Following positions at LG and Samsung, Ahn was most recently responsible for Apple’s battery cell technology as Global Head of Battery Development. Kai Alexander Müller from Barclays Investment Bank is responsible for finance. It has not yet been confirmed whether Jörg Hoffmann, who is currently Head of Solid-State Battery Program Management at BMW, will join as well.

The cell production is also expected to replace the engine jobs that are being phased out: Employees from the Salzgitter engine plant are primarily to be deployed. The company currently plans to create around 2,500 jobs but is also looking to hire new employees where necessary, especially when it comes to specific competencies. This means VW is transforming the Salzgitter site as the headquarters of the new battery SE, along with the factory as the battery hub for the group – at least for Europe. VW is also locating development and controlling in Salzgitter.

The very first factory, however, is being established together with the Swedish company Northvolt, which is supposed to produce the standardized cells for the premium segment. The locations of the next two battery factories are to be planned in the first half of 2022, with Spain and Eastern Europe currently under discussion. No statements have yet been made regarding the possible locations of factories 5 and 6, which are to be established by 2030.

What does this mean?

VW is intensifying its focus on battery and cell manufacturing and is converting Salzgitter into the leading battery site, at least for the EU.