Volkswagen has announced it will invest over 20 billion euros ($20.38 billion) in a battery cell business in a joint venture with other unnamed partners. The venture is expected to create 20,000 jobs and reach annual sales above 20 billion euros by 2030 as it seeks to become a leader in the car battery business.
The project will go by the name Mission SalzGiga, which is a reference to Salzgitter in Germany where Volkswagen has already made more than 63 million internal combustion engines. It is at the same site that the new Giga battery facility will be built.
The $20 billion investment will be used to construct two plants in North America and six plants in Europe, including Salzgitter, which will serve as the “blueprint” for all future standardized production sites for Volkswagen.
Each plant is expected to accommodate an annual production capacity of 40 GWh, sufficient to power 500,000 electric vehicles.
Volkswagen has established a new company called PowerCo in Salzgitter to handle all of the automaker’s global battery operations in order to accomplish this goal.
The Salzgitter factory will start producing cells in 2025, the company says it has already retrained 1,000 employees from making engines. In addition, Volkswagen claims that the battery plant will add another 5,000 employees in the next five years,
Still at the event, Volkswagen unveiled the standardized battery cell that it had previously revealed in 2021. The cell is currently used in up to 80% percent of the automaker’s electric models.
“What we have proven a million times over with Volkswagen vehicle platforms: standardising and scaling up allows for speed and cost optimization with the highest quality,” said PowerCo Chief Executive Frank Blome.