VW, partners to spend more than $20B on battery business

SALZGITTER, Germany -- Volkswagen Group said it will invest more than 20 billion euros ($20.38 billion) in a battery cell business jointly with partners, creating 20,000 jobs and reaching annual sales exceeding 20 billion euros by 2030 as it seeks leadership in the growing market.

The PowerCo unit will manage VW's global battery production and research from raw material mining through to recycling and projects including energy storage systems, the automaker said at the groundbreaking ceremony for its first European battery cell factory in Salzgitter, Germany.

"Today is a good day for the automotive industry in Germany," Chancellor Olaf Scholz said in a statement ahead of his speech at the ceremony.

VW has repeatedly said making enough batteries to power all cars is by far the biggest challenge of the shift to electric vehicles and has rolled out a plan to build factories with a joint capacity of 240 gigawatt hours by 2030.

This includes six plants in Europe, of which Salzgitter is the "blueprint" for VW's future standardized production facilities, and two in North America.

"What we have proven a million times over with VW vehicle platforms: standardizing and scaling up allows for speed and cost optimization with the highest quality," PowerCo CEO Frank Blome said.

At the ceremony, VW also presented the standardized battery cell it had announced in 2021 and which is to be used in up to 80 percent of the group's models.