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VW breaks ground on $20bn battery unit’s first cell plant which will generate more than €20bn (roughly R340,275,000,000) in annual revenue by the end of the decade.


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Volkswagen AG broke ground on a new battery plant located in Germany.

The Salzgitter venture is one of six battery plants VW has planned for Europe. PowerCo, the unit formed to oversee the carmaker’s global battery business, is expected to invest more than €20bn in five factories by 2030, creating roughly 20,000 jobs in Europe, according to a statement.

Automakers from VW to General Motors Co are exploring business models as they race to electrify their lineups and catch Tesla Inc, the world’s top seller of electric vehicles. They’re forging partnerships with battery cell makers and mining companies as they try to secure materials and know-how.

Salzgitter is home to VW’s main motor factory, and last year the carmaker opened an $80m (roughly R1,338,648,000) facility there to research, develop and test EV batteries. About €2bn (roughly R34,024,416,200) will be invested in the cell factory by 2026, where production is scheduled to begin in 2025. At full capacity, the plant will be able to produce 40 gigawatt-hours of cells per year, enough for roughly 500,000 EVs, according to the company.

“We hired very seasoned and experienced executives from the battery business,” CEO Diess said in an interview with Bloomberg Television.

“We’re gearing up to become one of the bigger battery-cell producers.”

VW plans to set up a cell plant in Valencia, Spain, may build another facility in eastern Europe close to its assembly plants, and is scouting for potential sites in the US, the CEO said. VW is open to inviting more partners to aid the battery push, he said.



PowerCo will be overseen by the VW executives who have been leading the carmaker’s battery efforts. Frank Blome, head of VW’s battery cell and systems, will be the unit’s CEO, while former Apple Inc executive Soonho Ahn will serve as chief technical officer. The PowerCo team in Salzgitter will oversee activities including procurement, raw materials processing, battery development and management of the planned plants.


IPO Prospects

VW has indicated it’s open to selling shares in the new business after a period of financing it internally and inviting in strategic partners. CFO Arno Antlitz said last month the unit has been set up in a way to facilitate a potential listing next year or in 2024.

VW’s battery push isn’t without challenges. In the shift to electric cars, manufacturers are facing a complete overhaul of their supply chains with soaring prices for raw materials that threaten to undermine returns.

“Some look with concern at the sheer magnitude of the task that lies ahead: can it all end well  for me, for my family, for my region?” German Chancellor Olaf Scholz said during the event in Salzgitter.

“That’s why I want to tell you it can end well and will end well, under one condition: that we don’t dwell on the past, but rather take the bull by its horns and aggressively accept the challenge of the new.”


Main Image: The ceremonial start of construction for the cell factory in Salzgitter. From the left, Frank Blome, CEO PowerCo, Daniela Cavallo, chair of the Group Works Council Volkswagen AG, Stephan Weil, prime minister of Lower Saxony, Herbert Diess, chair of the board of management of Volkswagen AG, Olaf Scholz, Federal Chancellor, Thomas Schmall, member of the Volkswagen AG board of management for technology and chair of the board of management at Volkswagen Group Components and Hans Dieter Pötsch, chair of the supervisory board of Volkswagen AG.
Image: Supplied



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Article Credit To Time LIVE Motoring.


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