VW Ramps Up BEV Capacity With Swedish Plant

Volkswagen is hoping to accelerate its BEV strategy by building extra capacity for battery production at a Swedish partner’s facility.

The automaker has pledged to erect buildings and infrastructure for joint battery cell factory in Salzgitter and will make an initial investment of €450M ($487M) in the joint venture with Swedish battery producer Northvolt AB. VW is hoping the joint venture’s “Northvolt Zwei” factory to produce lithium-ion battery cells will commence in early 2024 with an initial production capacity of 16 gigawatt hours. Construction work at the site is scheduled to commence before the end of this year.

In September 2019, the two companies established a joint venture to prepare for the large-scale production of lithium-ion batteries in Germany. This is the latest move by VW as it amasses technological expertise in the field of battery cell production as part of its electrification strategy.

Currently, its suppliers are LG Chem, Samsung and SKI for Europe as well as CATL for China and Europe. In addition, SKI will also supply battery cells for the US market. In Europe alone, Volkswagen expects annual demand of over 150 gigawatt hours from 2025, with demand in Asia at a similar level.

Dr Stefan Sommer, Volkswagen board member for components and procurement, said: “We are optimizing the Volkswagen Group’s strategic position in the key future field of batteries. In addition to a very secure supply base with external producers, we are also systematically building up further capacities.”

— Paul Myles is a seasoned automotive journalist based in London. Follow him on Twitter @Paulmyles_

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