In December, the Wolfsburg-based company announced a technology alliance with Umicore for the large-scale production of batteries.
(Photo: dpa)
Dusseldorf The Volkswagen Group is one of the few car manufacturers who want to produce battery cells themselves in their own plants. In order to secure the necessary preliminary products and raw materials, the carmaker allied with the Belgian raw materials group Umicore. Both companies are investing three billion euros in a joint venture that will produce the cathodes required for VW battery cells.
“The supply of raw materials is one of the critical points in setting up battery production,” said VW Chief Technology Officer Thomas Schmall on Monday. The cathode material is one of the essential components of a battery cell for electric cars and accounts for around 50 percent of the total costs. The joint venture will make a significant contribution to ensuring that Volkswagen will have sufficient batteries in the future.
By 2030, the VW Group intends to build six gigafactories with a total capacity of 240 gigawatt hours (GWh) for the European market alone, which should be enough for an annual total production of around five million electric cars.
Volkswagen has already determined the first three locations with Salzgitter in Lower Saxony, Sagunto in Spain and Skelleftea in Sweden. The car manufacturer calculates investment costs of around 20 billion euros.
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The joint venture with Umicore is to deliver the cathode material to the VW cell factories from 2025, initially for Salzgitter and later for the other battery locations. “The founding of the joint venture is an important day for the implementation of the European Green Deal,” emphasized Umicore CEO Mathias Miedreich. The many millions of electric cars that Volkswagen will produce in the future will make a significant contribution to meeting the EU environmental and climate targets.
VW is still looking for other partners
The joint venture between VW and Umicore is expected to supply cathodes for a total capacity of 160 GWh, i.e. for four of the six planned VW gigafactories. “The joint venture with Umicore is the first step,” emphasized Volkswagen board member Schmall. The car company is still working on other partnerships.
Volkswagen and Umicore have not yet made a final decision on where the cathode material will be produced in the future. The Upper Silesian town of Nysa (Neisse) in Poland is regarded as the most promising location. Umicore has already set up a cathode factory there with a capacity of around ten GWh. Nysa could be expanded in the coming years for the annual capacity of 160 GWh required by Volkswagen.
“We want to take some time with the final decision to find the really best location,” said Umicore boss Miedreich. There are still open questions in terms of logistics connections and financing. According to VW group circles, Umicore is currently still negotiating with the Polish authorities about settlement aid for Nysa. Miedreich added that Volkswagen and Umicore would each pay half of the total investment costs of three billion euros.
The group is planning six gigafactories in Europe.
(Photo: dpa)
Umicore initially wants to focus on the new joint venture with Volkswagen and is not currently considering supplying other car manufacturers. “It’s about a lot. That’s why you have to keep your commitments,” emphasized CEO Miedreich. The entire value chain for European battery cells must be built up step by step. That requires a certain amount of caution and restraint in order not to jeopardize the implementation of the plans.
The Umicore boss described Volkswagen as the “perfect partner”. Only a few car manufacturers pursued such a clear strategy in the direction of electromobility. The joint venture creates an essential basis for setting up our own cell production on the European continent.
Less dependence on Asian cell suppliers
By building its own cell plants, Volkswagen wants to make itself more independent of the previously leading manufacturers from China, South Korea and Japan. To date, suppliers such as CATL, Samsung SDI and Panasonic have dominated the cell business. The entire battery accounts for around 40 percent of the manufacturing costs of an electric car. It also has a key influence on the driving characteristics, such as the range.
The VW Group also wants to introduce a unit cell with uniform external dimensions in most of its future models from 2025, which can be produced in all six planned gigafactories. This should significantly reduce production costs.
Only the inner workings of the cells should differ: Volkswagen wants to vary the chemical composition. The chemistry then decides whether it will be more of a standard cell for the core brand Volkswagen passenger cars or a more sporty battery for the subsidiaries Porsche and Audi.
>> Read here, how the new VW CEO Oliver Blume wants to implement the electrical strategy.
Umicore and Volkswagen want to obtain the necessary raw materials for the cathode material from the EU if possible, in order to become less dependent on unreliable supplier countries such as Russia. At the end of last year, VW entered into a partnership with the company Vulcan Energy, which intends to produce lithium on German soil in the Oberrheingraben near Freiburg. The cathode of a car battery consists mainly of lithium and another metal, usually nickel, cobalt or manganese.
By the end of the decade, recycling is expected to play an important role in the supply of raw materials. Once a larger number of electric cars are on the road, the commercial recycling of used vehicle batteries is worthwhile. Volkswagen and Umicore also want to work together in the future when it comes to recycling battery raw materials.
More: VW subsidiary MAN plans to enter the electric truck business in 2024