VW will use part of its factory complex in Salzgitter, Germany, for battery production, working with Swedish company Northvolt. Battery cell production at the plant is scheduled to start in early 2024 with an initial production capacity of 16 gigawatt hours.
in Automotive News Europe, 28-10-2020
Europe will need to produce nearly one-third of the world’s supply of battery cells for electric vehicles by 2030 to maintain competitiveness, German Economy Minister Peter Altmaier said.
Analysts say the transition to low- and zero-emissions cars to meet EU targets will require up to 500 gigawatt-hours of cells, the building blocks of batteries, which represent the greatest economic input in an EV. That would represent at least a 10-fold increase in current European capacity.
Most automakers now rely on Asia-based companies such as LG Chem, Samsung and CATL for their cells.
Tesla, which currently sources cells from outside suppliers, says it will manufacture 100 gigawatt hours of proprietary cells by 2022. But there are also several home-grown European projects in the works, including a collaboration between PSA Group and Saft, a unit of energy company Total, and the Swedish company Northvolt, which is partnering with Volkswagen on a cell factory in Germany.
A key investment vehicle is the European Battery Alliance, an initiative from the EU that was launched in October 2017, which aims to create a competitive, sustainable and innovative EV battery ecosystem along the entire value chain, from raw materials through to recycling.
“More than 20,000 jobs could thus be created in the 2020s,” Altmaier said in prepared remarks for an online event hosted by the European industry group ACEA. “We want Germany and Europe to account for 30 percent of the global production of battery cells.”
Automakers could face a 50 percent cut in European CO2 fleet emissions by 2030, equating to an NEDC target of 47.5 grams per kilometer, a sharp reduction over the 122.4 grams recorded for 2019.
Volkswagen, which is investing tens of billions in electrification, expects that its European demand will top 150 gwh starting in 2025.
It has invested in a joint venture with Northvolt to build a 16 gwh battery cell factory in Salzgitter, Germany, that is due to start production by early 2024. It will source the remainder of its cells from other suppliers, although VW has not ruled out investing in new sites, for example at its Emden vehicle plant.
PSA’s project with Total/Saft, which it calls Automotive Cells Company, involves two factories, one in France and one in Kaiserslautern, Germany, each with a final capacity of 24 GWh.
The Kaiserslautern factory will primarily serve PSA’s German brand Opel. The German government is subsidizing the 2 billion euro project, after receiving approval for the state aid from the European Commission last December.
Daimler once manufactured cells in Kamenz, Germany, hoping to sell them to competitors as well, but it shuttered production at the end of 2015, citing uncompetitive costs.
This summer Daimler announced it was taking a stake in Farasis, a Chinese battery cell supplier, with one of the goals building a carbon-neutral cell factory in Bitterfeld-Wolfen, Germany.
“At Mercedes-Benz we do not think getting into cell production is a good use of our capital,” said the Daimler brand’s operations chief, Markus Schaefer, at its strategy update earlier this month.
“If we took a different route, it could cost us billions in capital, distract us from our core activities, and leave us at risk in the event of a technological leap,” he said. “Our strategy loses almost nothing in terms of speed and technology, but is much more financially intelligent.”