In a good mood, Volkswagen’s Chief Technology Officer Thomas Schmall (58), Jörg Teichmann, Head of Purchasing at the VW battery subsidiary PowerCo, Umicore CEO Mathias Miedreich (46) and Ralph Kiessling, Executive Vice President at the Belgian materials technology and recycling group, pressed at the same time in Salzgitter and Brussels on the red button. A few bright flashes streaked across the screens of numerous journalists. A little fanfare could not be missing when announcing a new battery joint venture.
Volkswagen and Umicore are jointly investing three billion euros in the development of production capacities for battery materials for electric cars. The joint venture should supply the battery cell factories of PowerCo in Europe with key materials from 2025. 2.5 billion euros of the total planned three billion euros are to flow in 2026. The investment is shared equally, as is the expected income.
The plan is to rapidly ramp up production of battery raw materials to keep up with the growing number of Volkswagen electric cars. “Cathode material is an indispensable strategic raw material for battery production, which accounts for around 50 percent of the total value of the cell,” emphasized Volkswagen Chief Technology Officer Thomas Schmall (58).
Immediate and long-term access to extensive capacities represents a clear competitive advantage. Together they strive to create a closed value chain, from the procurement of raw materials to the processing of battery material and the recycling of old batteries. the share
of the group fell by around 2 percent on Monday afternoon.
Umicore boss Mathias Miedreich (46) said that alliance was designed for Europe, but one could imagine global cooperation in the long term. Volkswagen recently had important battery raw materials through a Agreement secured with Canada and also plans investments in mining companies. Schmall made it clear that there are plans to supply battery factories with raw materials in the respective regions of the world. Every government is keen to settle core technologies with itself.
VW plans six cell factories in Europe
According to earlier information, Volkswagen expects costs of 25 to 30 billion euros to build the cell factories and secure the necessary quantities of raw materials in Europe. Overall, he wants to Toyota second-largest car company will have six large factories here with partners by the end of the decade, with a total capacity of 240 gigawatt hours (GWh). Another battery factory is to be built in North America. Locations are still under review.
The benchmark will be the first battery cell plant in Salzgitter, for which the VW Group laid the foundation stone in July Schmall said in an interview with manager magazin in July
. According to the Chief Technology Officer, VW will have to invest significantly less than other technologies, but they will use some that are superior. To this end, VW has already hired 800 battery cell specialists, with a future figure of 3,000. “Fewer mechanics, more chemists” is the motto at PowerCo, explained Schmall.
Production is scheduled to start in the middle of the decade
The Wolfsburg had already announced an alliance with Umicore in December and have been fine-tuning the details since then. The environment also includes the Lithium manufacturer Vulcan Energy
and US battery start-up 24M, in which Volkswagen has a stake. The search for other partners is ongoing to ensure the necessary quantities of raw materials and their processing, said Schmall. “There will be a few big partners, fewer than before. But not just one. We cannot overload the joint venture with Umicore and are therefore talking to the entire market.”
The joint venture that has now been set up, the name of which has not yet been decided, is to supply the majority of cathode material for Volkswagen’s battery factories in Europe. Production will start in the middle of the decade and initially supply the cell production of VW in Salzgitter in order to reach a capacity of 40 gigawatt hours per year in 2026.
By the end of the decade, the partners want to produce cathode and primary material for 160 gigawatt hours of cell capacity per year. This corresponds to an annual production capacity that is sufficient for around 2.2 million fully electric vehicles. The search for a suitable location is still ongoing. Nysa is considered likely in Poland, where Umicore recently opened its first European factory for the production of cathode material. It is still unclear who will supply the remaining 80 gigawatt hours for Volkswagen’s target capacity.
The two companies want to share costs, investments, income and profits equally. Umicore is responsible for the operational management and makes intellectual property and know-how available to the joint venture by license.
Umicore CEO Miedreich, a former Siemens, Continental and Faurecia manager, described Volkswagen as the “perfect partner” on Monday. The Wolfsburg-based company would contribute its know-how in automobile production, and through the PowerCo also its knowledge of battery cell production. Umicore, on the other hand, is the market leader in material value creation for batteries. If you bundle those expertises, “then who’s going to beat us,” Miedreich sounded. No other partnership has “such strength across the entire value chain”.
more on the subject
Umicore does not want to become completely dependent on Volkswagen, despite the high order volume from the Wolfsburg-based company. “We will continue to do business with other customers,” the head of the company made clear. Also with direct VW competitors: Umicore had concluded a strategic partnership with ACC in April. The Belgians want to supply materials for batteries with a capacity of 13 gigawatt hours to the joint venture between Stellantis, Mercedes-Benz and Total Energies from 2024. By 2030, the delivery volume should increase to at least 46 GWh – enough for half a million electric cars.