Volkswagen and Umicore announced a joint venture earlier this week. VW clarified that the collaboration with Umicore secures enough battery materials for 2.2 million EVs per year by the end of the decade, equivalent to 160 GWh of battery cells.
The German automaker is investing €3 billion into new materials production capacities to supply its factories starting in 2025. Volkswagen’s new battery company PowerCo was the one that entered into a joint venture with Belgian circular materials technology group Umicore for precursor and cathode material production in Europe, according to a VW press release.
“Cathode material is an indispensable strategic resource for battery production, accounting for roughly fifty percent of overall cell value. Immediate and long-term access to extensive capacity is thus a very clear competitive advantage. We are setting up a sustainable, transparent supply chain with high environmental and social standards, localizing value creation here in Europe,” said Thomas Schmall at the joint venture’s signing.
Schmall is a Board Member for Techonology at VW AG and Chairman of the Supervisory Board at PowerCo SE.
Under the joint venture agreement, production of the precursor and cathode materials is scheduled to start in 2025. The materials will supply PowerCo’s Salzgitter factory, helping it reach an annual capacity of 40 GWh in 2026. The long-term goal is to reach an annual production capacity of 160 GWh by 2030. Volkswagen is still searching for the site where PowerCo’s Salzgitter factory will be located.
“We are consistently entering the holistic value creation of the battery. A supplier industry for battery materials on the scale required does not yet exist today. We are changing that through our long-term cooperation with Umicore as a global market leader for the key materials used in cell production,” noted Jörg Teichmann, PowerCo Chief Procurement Officer.