Volkswagen Begins Pilot Line Production of EV Battery Cells in Germany

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【Summary】Volkswagen announced on Monday that a pilot line for small-series battery cell production began operating on Monday at the Volkswagen Group Center of Excellence in Salzgitter, Germany.

Eric Walz    Oct 30, 2019 4:45 PM PT
Volkswagen Begins Pilot Line Production of EV Battery Cells in Germany

As electric vehicle production increases, global automakers are looking to secure a stable supply of lithium ion batteries from suppliers. Many automakers rely on Asian suppliers such as Panasonic and South Korean battery maker LG Chem. Panasonic for example, builds batteries for electric automaker Tesla in a joint venture.

In addition to exploring supply deals with global battery producers, German automaker Volkswagen is working with Sweden-based Northvolt to develop its own battery cells to order to meet demand for building millions of electric models.

The automaker announced on Monday that a pilot line for small-series battery cell production began operating on Monday at the Volkswagen Group Center of Excellence in Salzgitter (Lower Saxony), Germany. 

The automaker said that 300 experts are currently involved in developing, testing and manufacturing for the production of advanced lithium-ion batteries. Volkswagen expects that over 1,000 jobs will be created by 2023 for developing and producing battery cells.

"Volkswagen is swiftly and consistently moving forward with building up battery cell know-how in Germany." said Volkswagen Group Board Member Dr. Stefan Sommer who oversees battery procurement for the automaker.

Along with the 300 people developing battery cells in Salzgitter, the automaker plans to employ another 700 in a new joint venture to build and operate a battery cell factory with Northvolt. Volkswagen will invest 1 billion euros (US$1.1 billion) in its battery cell development over the same period.

Volkswagen is initially investing over $110 million in its own in-house development and production of batteries.The remaining $990 million will be invested in joint battery production with Northvolt. 

"Today's commissioning of the pilot line is an important step on the road to building a gigafactory at the Salzgitter site. We will further deepen our knowledge of production processes within a short space of time." said Frank Blome, Head of the Center of Excellence for Battery Cells in Salzgitter "The experience gained will also contribute to mastering the entire value chain for lithium-ion batteries – from raw materials through production to recycling."

Construction of a 16 gigawatt hour battery cell factory in Salzgitter is scheduled to begin in 2020.

"Bringing together the development, testing and pilot production of battery cells in Salzgitter marks a further milestone in the Volkswagen Group's comprehensive electric offensive. By pooling know-how at this site, we are making sure we drive forward our own activities to further advance the development of battery cells as a key component in electrification, develop new standards and swiftly transition them to series production." said Dr. Sommer in a statement.

The development work at the new center ranges from increasing the energy density of battery cells for developing longer range EVs, to reducing the use of scarce raw materials such cobalt in manufacturing. Volkswagen will also explore sustainable manufacturing processes and the recycling and repurposing of used EV batteries.

"We already develop and manufacture power electronics, battery systems, electric motors and charging systems, and are building up battery recycling know-how. With the integration of the battery cell business area, Volkswagen Group Components is on track to becoming a globally leading producer of e-mobility components." said Thomas Schmall, Chairman of the Board of Management of Volkswagen Group Components.

The work is designed to optimize battery cells for future use in the Volkswagen Group's electric models in cooperation with its suppliers. The automaker is in the midst of shifting its focus to producing electric models and said it may built up to ten million electric models on its newly developed MEB architecture.

The new modular architecture consolidates all of the vehicle's electronic controls and reduces the number of microprocessors, allowing the automaker to build electric cars more efficiently at scale and at a lower cost.

A battery recycling pilot line is also under construction in Salzgitter and is slated to begin operating in 2020.

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