VW to Spend $2.3 Billion on Battery Hub, Sets Up New Unit

Customers look under the hood of a Volkswagen AG ID.4 electric sports utility vehicle inside a VW showroom in Berlin, Germany. (Liesa Johannssen-Koppitz/Bloomberg)

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Volkswagen AG will invest 2 billion euros 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 automaker said Dec. 13. It also will work on designing new business models around 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.”

Host Mike Freeze talks to the 2021 Transport Topics Trucking's Frontline Heroes, Gene Woolsey and Cully Frisard. Hear a snippet above, and get the full program by going to RoadSigns.TTNews.com.

VW’s 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, rising to 40 gigawatt at a later stage. The carmaker plans to employ about 2,500 workers, who mostly will be retrained staff from a nearby engine plant.

Over the next five years, Volkswagen, which previously has said it is open to listing its battery business, plans to invest around 52 billion euros in the development and production of new electric vehicles, the industry’s biggest push.

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