Volkswagen Backed PowerCo & Umicore Create JV For European Battery Production

Volkswagen-backed PowerCo and Umico form a joint venture which will focus on precursor and cathode production in Europe. This joint venture will supply key materials to PowerCo from 2025 as Volkswagen ramps up battery production in the continent to achieve its 160Ghw cell per year target. Volkswagen has had a plan for achieving battery supply for 2.2 million electric vehicles and the cathode is a crucial element for the creation of a battery pack. Umicore will also be providing refining services to PowerCo. 

“Cathode material is an indispensable strategic resource for battery production, accounting for roughly fifty percent of overall cell value. 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, localizing value creation here in Europe,” said Thomas Schmall, group board member at Volkswagen AG and chairman of the supervisory board for PowerCo SE.

To begin with the production will start at the PowerCo’s Salzgitter factory in 2025 for an annual capacity of 40 GWh in 2026. This will be scaled to 160 GWh by 2030. 

"The availability, cost and technical performance of battery cells are key requirements for the successful ramp-up of e-mobility. By building up substantial production capacities, we are securing the rapidly growing demand for battery-grade materials for our main customer Volkswagen AG in terms of volume and at optimal cost,” said Frank Blome, PowerCo’s CEO. 

With Umico, the two plan on investing 3 billion Euros which makes this JV significant for the European battery supply chain. 

"This partnership is a strong signal of recognition of our product and process expertise and a testament to the success of our strategy to establish sustainable industrial-scale, closed loop battery materials value chains in key regions. We are supporting our customers on their path to electrification right from the start, and are very pleased to partner with PowerCo and support Volkswagen in their fast transformation towards sustainable electric mobility,” added Umicore CEO Mathias Miedreich.