• Wednesday, Dec 08, 2021
  • Last Update : 12:53 am

Volkswagen to partner up with Chinese battery-cell manufacturer

  • Published at 06:59 pm July 17th, 2021
Volkswagen logo
A Volkswagen logo is seen at a construction completion event of SAIC Volkswagen MEB electric vehicle plant in Shanghai, China, Nov. 8, 2019 Reuters

The global carmaker plans to start production of its own battery cells in Salzgitter, Germany

As the company aims for half of their sales to be of electric vehicles by 2030, Volkswagen (VW) has recently made huge changes in that direction. VW has already started to manufacture mainstream full-electric cars such as the ID3, for which the company has to rely on importing battery cells from China. 

They do not plan to change that business model entirely, but the German brand plans to start production of its own battery cells in Salzgitter. Salzgitter is an independent city in the southeastern part of Germany, quite well known for its steel industries.

Volkswagen intends to set up a pilot line for cell production and a battery recycling pilot plant which will act as a solid foundation for the construction of the cell factory, which is expected to start construction by 2025. VW is looking to partner up with Gotion High-Tech, one of the biggest lithium battery manufacturers in China. 

The company that went public in 2015 was also the first power battery company to enter the capital market. This is the first time ever that a global car manufacturer is investing directly in a Chinese battery supplier. As European and American automobile brands are moving towards electrification, this is a kind of move we are likely to see more in the future. 

 “With our cutting-edge battery technology and rich experiences in battery manufacturing, Gotion High-Tech will fully support Volkswagen Group’s electrification strategy and together promote the carbon-neutral transition by 2050 to completely change human society’s dependence on fossil energy. I firmly believe this cooperation will be a successful model of Sino-European Trade and Economy, as well as of the global new energy strategy,” said Zhen Li, CEO of Gotion High-Tech.

In May, both the companies signed an agreement stating that VW Investment Co. will become the largest shareholder in Gotion High-Tech. VW Investment Co. will acquire 26% shares through a buy-in of around 1.1 billion Euros. 

Both the partners are currently working on the procedures of the deal. Gotion High-Tech is going to become a certified VW Group battery supplier and are expected to supply the components needed in the build of the MEB (Modular Electric Vehicle Platform) of the German manufacturer.

Before the unified cell will be developed and produced in high volume, VW Group will have to rely on existing battery suppliers. According to the chairman of the board’s ambitious targets, VW’s long-term goal is to become one of the top three battery cell manufacturers globally. 

This is especially interesting to see that major car makers around the world are complying with the new laws set by the European Union to become environmentally friendly and to achieve a net zero on carbon emissions by 2050.  

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