Volkswagen to open ‘SalzGiga’, the first of six electric vehicle battery factories

  • News of planned electric vehicle battery factories has become increasingly mainstream as automakers such as Tesla, Ford, General Motors, Hyundai and others move forward with ambitious plans for electric vehicles .
  • The latest is VW, which has announced plans to open six battery cell production plants starting with Salzgitter, or the “SalzGiga” project, which it calls “the blueprint” for the total six battery plants. which he plans to open.
  • The first plant will enter production in 2025 and is intended to meet the battery needs of around 500,000 electric vehicles once operational.

    The Volkswagen Group this week held a “symbolic groundbreaking ceremony” for what it calls SalzGiga, the first of six identical battery cell production plants it plans to build in Europe and North America. over the rest of the decade. The new plant, with a planned capacity of up to 40 gigawatt hours, will supply around half a million electric vehicles. It will go into production in 2025.

    The cell factory will be operated by PowerCo, a battery manufacturing subsidiary of VW Group established in January. Ultimately, VW plans to build 240 GWh of battery production capacity for up to three million electric vehicles by 2030.

    VW

    VW follows Tesla, BYD, GM

    In doing so, VW is following in the footsteps of Tesla, BYD, General Motors and other manufacturers. Tesla has Gigafactories for operational cells and/or vehicles in Reno, Nevada; Austin, TX; Berlin, Germany; and Shanghai, China, totaling up to 150 GWh at full capacity. Others are on the drawing board. CEO Elon Musk first talked about the need for a “gigafactory” to build huge volumes of cells in November 2013, when Tesla was still struggling to ramp up production of its Model S.

    vw salzgitter battery factory

    VW

    vw salzgitter battery factory

    Chinese automaker BYD actually started as a battery company in 1995, then branched out into vehicles in 2003 after acquiring a small Chinese automaker. At first it only sold cars with internal combustion engines, then added plug-in hybrids. He built his last plug-less car last March.

    Similarly, GM is planning five joint venture battery factories with its longtime partner LG Energy Solutions. The first, in Lordstown, Ohio, is expected to go into production this year. Two more locations have been announced, in Spring Hill, Tennessee and Lansing, Michigan. All will supply cells to a growing number of electric vehicles planned for the company’s Ultium platform. Cells for the currently low volume of GMC Hummer EVs and Cadillac Lyriqs are now being produced on a small pilot production line operated by the partners in Michigan. The total capacity across the five will be around 150 GWh.

    Since this year, BYD has been selling more plug-in vehicles (both battery-electric and plug-in hybrids) than even Tesla – let alone GM – so VW Group is trailing behind. This is partly due to the political sensitivity of its massive employment to the German economy. A significant part of the company is owned by the Land of Lower Saxony and representatives of the works council (trade union) sit on the company’s board of directors.

    Appease employees, political concerns

    The location of VW’s first “giga” factory is therefore of great symbolic importance. It’s being built at Salzgitter, the massive factory where more than 6,800 employees now assemble around one million combustion engines a year. The site has built more than 62 million engines to date, ranging from 4 to 16 cylinders. But with many markets pledging to end sales of vehicles with tailpipes by 2030 or 2035, those jobs are clearly at risk. VW has therefore set up what it calls its global battery development center in the heart of Lower Saxony, in this factory. Thursday’s carefully choreographed event, attended by employees, executives and dignitaries, was meant to underscore the message that jobs would be saved.

    Many dignitaries, including German Chancellor Olaf Scholz, spoke at the SalzGiga ceremony. One was the Prime Minister of Lower Saxony, Stephan Weil, who used automotive history in an analogy for this latest Salzgitter development. He noted the 1970 Volkswagen K70, the first VW in history to be powered by a water-cooled inline four-cylinder engine – even driving its front wheels – was built at the Salzgitter plant. This presaged the company’s later and successful Golfs and Passats.

    This analogy was surprisingly apt, since the intellectual property represented by the K70 had not been developed by VW at all. The model came from NSU, which VW acquired after the company went bankrupt due to development and warranty costs for its Wankel-powered Ro80 luxury sedan.

    Similarly, VW does not have sole ownership of the cell chemistries that will go into the large volumes of batteries powering the millions of electric vehicles it will produce by the end of this decade. Tesla has partnered with Panasonic and GM has partnered with LG, but VW notably omitted any discussion of its cellular partners at today’s ceremony.

    Instead, while CEO Diess proclaimed that the company is “bringing the cutting-edge technology of the future to Germany”, today the source of that technology remains primarily in Asia.

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