Volkswagen has teamed up with Belgian materials firm Umicore and announced a €3bn (£2.6bn) battery parts joint venture.
The German powerhouse is the latest automotive maker aiming to bring battery production in-house to protect it from geopolitical tensions as it also reduces logistics costs.
While raw materials will be sourced from around the world, the venture will produce 160GWh worth of cell capacity a year, enough to power around 2.2 million EVs.
Even though the mass ramp up will likely take place at Umicore’s Polish plant, cathode production is scheduled to begin in 2025 at Volkswagen’s German factory in Salzgitter.
The automotive maker will start with 40GWh of capacity by 2026, with plans to build six factories in Europe for a total of 240GWh of capacity by the end of the decade.
“Cathode material is an indispensable strategic resource for battery production, accounting for roughly fifty percent of overall cell value,” said Volkswagen’s board member Thomas Schmall.
“Immediate and long-term access to extensive capacity is thus a very clear competitive advantage.
“We are setting up a sustainable, transparent supply chain with high environmental and social standards, localising value creation here in Europe.”
Volkswagen – which is set to overtake Tesla as the world’s largest battery-electric vehicle manufacturer by 2024 – has pledged to build 800,000 EVs by the year’s end.