The Volkswagen Group has invested 20 billion euros in its newly established battery company PowerCo, formally establishing its largest shift and commitment to the new energy vehicle sector. This will make PowerCo Europe's largest manufacturer of lithium-ion batteries.
Volkswagen plans to invest 20 billion euros in PowerCo, with a planned total capacity of 240GWh. The company will build six factories in Europe and employ 20,000 people.
Volkswagen and PowerCo's announcements showcase Volkswagen's ambitions to fill gaps in the European supply chain, boost cell manufacturing growth in the region and compete with Asian counterparts. Once these plants are in operation, Volkswagen will have a leading position in the European market. Judging from the current announcement alone, Northvolt's planned production capacity is as high as 130GWh, making it the largest cell manufacturer in Europe after Volkswagen.
In a PowerCo statement, Volkswagen reiterated its commitment to the "standard factory" and "one cell" strategy. "Standard Factory" is the concept of a common blueprint that enables the construction of the same factory anywhere. Volkswagen hopes the plan will cut the plant construction cycle in half from three years to 18 months.
Volkswagen expects this standardized method of battery cell production to save up to 50 percent. While standardized manufacturing will increase efficiency, recent volatility in commodity prices will make it difficult to reduce material costs, at least in the short term.
