VW to spend billions to set up a dedicated battery unit

Volkswagen will invest €2bn in a planned battery hub in Germany as part of a decision to create a dedicated company for the carmaker’s battery business.

The new unit will consolidate the processing of raw materials, battery development and managing its six future European cell factories, the region’s biggest vehicle maker said on Monday. It’ll also work on designing new business models about reusing discarded car batteries and recycling.

“We want to offer our customers powerful, inexpensive and sustainable vehicle batteries, which means we need to be active at all stages of the battery value chain,” VW’s head of development, Thomas Schmall, said in a statement. “We are now bundling our power in Salzgitter, with the aim of encouraging innovation.”

VW’s future battery hub at Salzgitter will start production in 2025 for the company’s volume cars. Its initial phase will have annual capacity of 20 gigawatt hours (GWh), rising to 40GWh later. The carmaker plans to employ about 2,500 workers at the site, who will mostly be retrained staff from a nearby engine plant. 

Over the next five years, Volkswagen, which has previously said it is open to listing its battery business, plans to invest about €52bn in the development and production of new electric vehicles.

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