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volkswagen: Volkswagen takes on US, China rivals with battery factory

by WOOWinvest
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volkswagen: Volkswagen takes on US, China rivals with battery factory

Volkswagen on Thursday celebrated the opening of its first in-house battery factory as the German auto giant looks to thwart competition from U.S. and Chinese electric vehicle upstarts.

Chief Executive Herbert Diess said at a ceremony attended by German Chancellor Olaf Scholz that the company plans to “lead the world” from its new plant in Salzgitter, central Germany. Battery Offensive”.

Volkswagen has set itself the ambitious goal of becoming the world’s largest electric car maker by 2025, spending a total of 46 billion euros ($46.8 billion) over the next five years.

“If Germany and Europe don’t want to be left behind by the US and China, we need to focus more on future technologies,” Diess said.

The Salzgitter complex, which currently sees thousands of internal combustion engines rolling off the factory line every day, will become the center of Volkswagen’s electric ecosystem.

2 billion euros will be invested in the battery plant, which has the potential to produce batteries for 500,000 cars a year by 2026.

The plan will also serve as a blueprint for European battery factory fleets.

Sustainable, Climate Compatible Until now, traditional automakers such as Volkswagen have relied heavily on Asian battery makers, especially Chinese battery makers, to install their cars.

Western auto giants are keen to bring production in-house to minimise supply disruptions and derive added value from battery production.

The “reliance” on distant suppliers is a “huge risk” for manufacturers, said Scholz, who placed the last battery.

“Today is a good day for the auto industry in Germany and Europe,” he said, adding that VW was paving the way for “sustainable, climate-compatible mobility.”

Europe’s largest economy is aiming to have 15 million electric vehicles on its streets by 2030, Scholz said.

Volkswagen’s new PowerCo division plans to invest more than 20 billion euros with partners, aims to generate annual sales of more than 20 billion euros, and employ up to 20,000 people in Europe alone. Salzgitter will employ around 5,000 people.

Diess said Volkswagen plans to open six plants in Europe with partners and another in the United States.

The first, in partnership with battery manufacturer Northvolt, will open in Sweden in 2023, followed by the Salzgitter plant in 2025.

Volkswagen has set up a battery plant in Valencia, Spain, and is discussing other locations in other existing production locations in Europe.

Major rival Tesla opened its first European factory outside Berlin earlier this year. The factory in Gruenheide will be equipped with its own battery factory.

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