VW Group announces battery cell production in Germany

Volkswagen Group has announced it will industrialise EV battery cell production in Germany, in a deepening of its partnership with Chinese battery-maker Gotion High-Tech Co.

The companies will now gear up to make battery cells at Volkswagen’s Salzgitter engine plant, with production scheduled to begin in 2025.

Before then, Salzgitter will be outfitted with battery cell laboratories, pilot lines for cell production and battery recycling.

Volkswagen intends to establish more six gigafactories in Europe alone to ensure future supply of vital components.

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The announcement forms part of Volkswagen’s ongoing shift towards electric production, as Europe aims at being carbon-neutral by 2050. According to a joint statement, the move will “significantly reduce battery complexity and costs while boosting range and charging performance” across the marque's product lines.

The main objective of the partnership is development of the ‘unified cell’ concept announced on Volkswagen’s March 15 Power Day. The concept refers to a modular battery format which will be suited for use in 80 per cent of VW Group’s electric vehicles.

Engineered for both existing and future chemistry mixes, the company expects the design to reduce battery production costs by up to 50 per cent. The first vehicles featuring the unified cell are expected to hit the market in 2023.

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VW has held a 26 per cent stake in Gotion High-Tech since May 2020, when it became the first global car firm to directly invest in a Chinese battery supplier. The deal was estimated to be worth €1.1 billion (AU$1.75 billion).

Gotion is also becoming a certified supplier for Volkswagen Group China, which delivered 3.85 million vehicles to China and Hong Kong in 2020.

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VW is aiming to sell one million electric vehicles this year and become the global EV market leader by 2025. A major part of the company's ongoing strategy will be the universal Scalable Systems Platform, due to appear in 2026.

Though VW plans to entirely axe petrol and diesel cars in Europe by 2035, no date has so far been set for the Australian market.