Volkswagen enters battery cell production in Germany

Heavyweight carmaker Volkswagen has announced the launch of a battery cell production facility that will be operated in partnership with another company. In the framework of the company’s e-mobility strategy, the world’s biggest car producer will invest nearly one billion euros in a factory near Salzgitter in the company’s home region of Lower Saxony in northern Germany. “As part of our comprehensive electrification offensive we plan to secure our battery capacities through strategic partnerships,” board chairman Hans Dieter Pötsch said in a press release, without naming potential partner companies. Company CEO Herbert Diess said all carmakers were faced with “a fundamental transformation” of their business model and Volkswagen would be “vigorously” driving forward the shift towards electric engines. Volkswagen’s workers’ council head Bernd Osterloh said the employee representatives welcomed the decision as it would ensure the company’s sustained profitability and secure jobs. In another press release, Volkswagen said it had received more than 15,000 pre-orders for its new e-car model ID.3 in the first week.

Battery cell production in Germany has for long been flaunted as an essential step towards securing the future of the country’s mighty car industry, which currently has to rely on Asian suppliers to procure the battery components for its first generations of e-car models. While economy minister Peter Altmaier has repeatedly called for developing battery cell production capacities across Europe, many carmakers so far have shied away from entering the market due to high initial investment costs and the overwhelming advantages that Asian manufacturers hold due to their longstanding experience. Carmaker Opel in late April announced it would start battery cell production in Germany in cooperation with French parent company PSA.