Transformation to a climate-neutral industry

First VW battery cell plant Transformation to a climate-neutral industry

“Today, all of us here are laying the foundations to enable a key element of future mobility to come from Salzgitter once again. We’ve all now come to realise that this future has to be sustainable and climate-friendly,” said Federal Chancellor Olaf Scholz at the ceremony to mark the laying of the foundation stone for the new battery cell plant in Salzgitter.

Federal Chancellor Scholz at the ceremony to mark the laying of the foundation stone for VW’s first battery cell production plant in Salzgitter.

Federal Chancellor Scholz at the ceremony to mark the laying of the foundation stone for VW’s first battery cell production plant in Salzgitter. Production is scheduled to start in 2025.

Photo: Federal Government/Steins

As Federal Chancellor Olaf Scholz said at the beginning of his speech at the laying of the foundation stone for the new battery cell plant in Salzgitter, this town had once before witnessed a bold new beginning back in the 1970s with the production of the VW “K70”, which despite initial uncertainty had gone on to be groundbreaking and highly successful. This was a good omen for the future, he said. “After all, the situation now is similar to what it was back then,” said Scholz.

“Today, all of us here are laying the foundations to enable a key element of future mobility to come from Salzgitter once again. We’ve all now come to realise that this future has to be sustainable and climate-friendly,” said Scholz. In order to combat climate change, Germany has committed itself to achieving climate neutrality by 2045 – in close coordination with its partners in Europe and worldwide.

Transformation to a climate-neutral industry has the potential to be a success

There was hardly any other industry in which the transformation required to meet climate protection targets was as far-reaching as in the automotive industry, said the Federal Chancellor. This was particularly clear in Salzgitter, he added: the plant was still producing internal combustion engines – with a total output of more than 60 million since 1970. The burning of fossil fuels was coming to an end so all major car manufacturers had opted for electromobility, said Scholz, adding that this would cause considerable upheaval since thousands of jobs were at stake. VW had recognised this, which was why it was establishing Salzgitter as its centre for battery production, said the Federal Chancellor.

This would mean a 180-degree turnaround, making huge demands of everyone concerned, he said. He could understand that some people were worried about the extent of change that lay ahead, he said – for themselves, for their families and for the region as a whole. But things would turn out well, said Scholz, providing everyone was “proactive in taking on the challenges involved.” This was how things had always been done by VW, he noted – and it was a strategy that had always proved successful. “Through the work you do, it is you who are enabling this shift towards climate-neutral industry and climate-neutral society in the first place,” said the Federal Chancellor. “For this you deserve enormous respect and thanks, as well as all the support you need.”

Batteries made in Germany increase independence

The coronavirus pandemic and Russia’s brutal attack on Ukraine had clearly shown – if it had not be clear before – that dependence on global supply chains was too great a risk. What is more, he said, it was not a good thing “if a container ship stuck across the Suez Canal can hinder us on our way to establishing electromobility and achieving climate neutrality”, the Federal Chancellor said, adding that this was why the new battery cell plant in Salzgitter and its employees had such an important role to play.

Protect the climate and remain an industrialised nation

“We want to see 15 million electric vehicles on Germany's roads by 2030. We want value creation and jobs to stay here in Germany and Europe. We want to secure a successful climate transformation – and we want to remain an industrialised nation at the same time. That’s why there’s no question that we need our own battery cell production facilities here in Europe, here in Germany and here in Salzgitter,” stressed Scholz.

Electromobility
Electromobility has a major role to play in climate-friendly transport. This is because electric vehicles produce less CO2 during use than internal combustion vehicles – especially when they are charged with electricity generated from renewable energies. The Federal Government is looking to put at least 15 million fully electric passenger cars on Germany’s roads by 2030. So far, there are around one million electric cars in the country. The Federal Government supports the purchase of such vehicles with its offer of an Error! Hyperlink reference not valid..

Salzgitter to become the centre of VW’s European battery production

If Germany and Europe don’t want to be left behind by China and the USA, we’re going to have to focus even more on future technologies,” said VW Group CEO Herbert Dies.

Clear political decisions supporting battery technology, the development of software expertise and, above all, investments in renewable energies were crucial for the future of Europe, he said, adding that by establishing the new battery cell factory “SalzGiGa”, VW would be able to remain a driver for e-mobility. VW Salzgitter would become a model of transformation – enabling us all to remain proud of the ‘made in Germany’ seal of quality”, said the Group CEO.

Salzgitter battery cell plant
At the new plant, the VW company PowerCo aims to produce so-called unit battery cells for the Group’s models from 2025 onwards. The first stage will involve the plant producing 20 gigawatt hours of annual capacity, with plans to double this to 40 gigawatt hours so as to be able to supply approximately 500,000 e-vehicles in total. This first large-scale battery cell production plant will be the blueprint for further large battery factories planned by VW in Europe to meet the Group’s increasing demand for cells. VW and its partners plan to be operating six cell factories with a total capacity of 240 GWh by 2030.

Battery cell production in Salzgitter and the VW start-up PowerCo will have global significance, said Lower Saxony’s State Premier Stefan Weil, ensuring that the state “remains a car region –but climate-neutral and well set up for the future.”

“Unit cell” – recyclable and made with green electricity

The first VW battery cell factory is currently being built on a construction site covering a surface area in Salzgitter that is equivalent in size to 30 football pitches. In future, the Group plans to produce “prismatic unit cells” and use these in 80 percent of its models. The “unit cell” is to enable flexible use of a wide variety of cell chemistries. Battery costs are expected to drop by up to 50 percent. Each VW battery plant is to run on 100 percent renewable power and will be designed for future closed-loop recycling – i.e. more than 90 percent of the raw materials used in the batteries are to be recycled and reused in the future.

Federal Government provides funding for sustainable batteries made in Germany and Europe

Currently, battery cells for electric vehicles are not yet produced on a large scale in Germany or Europe. Experts predict that global demand for lithium-ion batteries will increase from 200 gigawatt hours annually today to more than 2,000 gigawatt hours by 2030, with electromobility accounting for a very significant share of this.

In order to trigger investment and gain independence from imports in this key future field, the Federal Ministry for Economic Affairs and Climate Action is providing funding of almost three billion euros for the industrial production of battery cells for mobile and stationary energy storage. This money comes from the Federal Government’s Energy and Climate Fund. The aim is to cluster and strengthen the technological expertise required for battery cell production in Germany. In addition, large-scale production facilities are to be established in Germany and Europe based on research and innovation.