The pilot line for battery cell assembly in Salzgitter is running! Lithium-ion battery cells are produced at the “Center of Excellence”. Why is Volkswagen investing in pilot cell assembly? The most important questions and answers:
Batteries account for 40 percent of the added value of electric vehicles. This is why the Volkswagen Group is working intensively to ensure that batteries and battery cells become another core competence in the future.
What is the “Center of Excellence for Battery Cells” in Salzgitter?
In addition to Group research, the Center of Excellence (CoE) for Battery Sells plays a key role in Volkswagen’s battery strategy. The CoE takes Group-wide responsibility for the development, procurement and quality assurance of all battery cells.
Why in Salzgitter?
Battery cells are the key components for e-mobility. This is why Volkswagen develops battery technology into a core competence in order to ensure cost leadership in batteries and thus the competitiveness of its e-vehicles.
Only by building its own expertise up can the technological course be set at an early stage in development and production. Volkswagen’s e-locations in Emden and Hanover will create an efficient e-cluster in Lower Saxony. In addition, the proximity to the Group’s production locations brings logistical advantages: Zwickau for example, where series production of the ID.31 will start in the autumn, is just 300 kilometers away from Salzgitter.
How a lithium-ion battery is made
Volkswagen’s pilot line at the “Center of Excellence” in Salzgitter is up and running. In a few, but also demanding stages, experts produce lithium-ion batteries as part of a complex assembly process. Read more
Who works at the Center of Excellence for Battery Cells?
Around 300 experts work in Salzgitter in the fields of electrochemistry and cell technology, as well as in traditional areas such as quality management, design and procurement – across Group and functional boundaries. The CoE assumes Group-wide responsibility for the development, procurement, project and portfolio management and quality assurance of all battery cells.
Who runs the CoE?
Frank Blome has headed the Center of Excellence for Battery Cells at Volkswagen since January 2018. Frank Blome holds a degree in electrical engineering and began his career in 1995 as a development engineer. Following positions at Continental AG as project manager and development manager for electric drives, he became head of the Energy Management business unit at Continental AG in 2004. In 2009 he was appointed Chairman of the Board of Management of Deutsche ACCUmotive GmbH, a Daimler subsidiary, in Kirchheim/Teck and Kamenz. From 2013, Blome was also head of Li-Tec Battery GmbH.
What is the goal of the pilot line at the CoE in Salzgitter?
The pilot line will go into operation to build up process and manufacturing competences and to research and industrialize innovative manufacturing processes. In this way, Volkswagen is creating the conditions for an entry into cell production. Thanks to pilot assembly, it is possible to further deepen knowledge of the production processes in a very short time and under one’s own steam. This is important for shaping future developments and thus ensuring performance, costs and quality.
What type of battery cells are produced?
Volkswagen’s pilot line in Salzgitter is not about the assembly of battery cells for series production vehicles, but about the production of lithium-ion battery cells in test batches for research and development purposes. The solid cell is also being researched in cooperation with the US company QuantumScape.
What other pioneering battery projects are there?
In 2020, a pilot recycling plant will be built in Salzgitter, the operation of which is the responsibility of the Group Components unit. Employees are researching innovative recycling processes with the aim of recycling lithium-ion batteries at low costs, low CO2 emissions and with high reuse of resources. The battery is not hazardous waste, but a valuable source of raw materials! The goal is to ensure recyclable materials and the recycling of valuable E-raw materials such as nickel, manganese, cobalt as well as copper, steel and aluminum – ecologically and economically sustainable.
As early as 2020, 1,200 tonnes per year will be recycled with the pilot recycling plant – equivalent to around 3,000 vehicle batteries. A further capacity increase is planned for the years thereafter. But battery recycling will not become relevant until around ten years from now, when there will be larger quantities of battery returns. This is the earliest point by which the first large proportion of e-vehicles (delivered in larger quantities from 2020) will have reached their service life. Volkswagen gives a guarantee on the batteries for 8 years and 160,000 kilometers.
What are the battery challenges here?
In battery cell production, raw materials are an essential, but in some cases also a critical factor. At Volkswagen, sustainability and social responsibility therefore do not start with production, but with the supply of raw materials. For this reason, the Group does not limit its activities to itself and its direct suppliers, but discusses the issue with all stakeholders along the entire value chain. Only in cooperation with industrial partners can grievances be remedied.
First, the Volkswagen Group insists on fair mining conditions at all suppliers and checks whether these commitments are being met. The Group strongly condemns child or forced labor. In general, respect for human rights is an integral part of sustainability requirements. All suppliers are obliged to agree environmental, social and compliance standards with their subcontractors.
Secondly, Volkswagen Group uses exclusively industrially mined cobalt, a particularly problematic raw material in the raw material chain, for its battery cells. Companies that purchase cobalt from illegal small-scale mining do not enter the supply chain. In addition, the cobalt content will be significantly reduced in the next generations of battery cells. This reduces costs and increases energy density. In the medium-term, Volkswagen will reduce the cobalt content from 12 to 14 percent today to less than 5 percent. Completely cobalt-free batteries are also conceivable.
Thirdly, Volkswagen Group is involved in initiatives to ensure compliance with human and environmental rights. These include, for example, the Responsible Minerals Initiative, which is working on a certification system for cobalt melts.
The already operational pilot assembly line is a step towards an own large-scale battery cell assembly line?
At the Center of Excellence, the required knowledge for the development of a battery cell assembly-line is being researched. The Group is investing almost one billion euros to set up its own 16-gigawatt hour battery cell factory with its joint venture partner Northvolt.
Why doesn’t Volkswagen just buy all its batteries from its suppliers?
Worldwide, Volkswagen has a high demand for battery capacity for equipping the Group’s own electric fleet alone until 2025: 150 gigawatt hours in Europe alone and the same amount in Asia. Volkswagen Group covers the volume for the first wave of electric vehicles with long-term supply contracts with competent partners. The strategic battery suppliers are LG Chem and SKI for Europe and CATL for China. SKI will also supply the battery cells for the US market.
At present, there are only 20 gigawatt hours of capacity available in Europe. This means that there is an enormous value creation potential for battery cell assembly in Europe, so that sufficient capacities are available. In addition, it makes no sense logistically or economically to supply large volumes for series production over long distances. Proximity to the production sites is crucial. But Volkswagen will also continue to work with its suppliers in the long-term to ensure a sufficient supply of battery cells.
So far, the majority of battery cells for electric cars have come from Asian countries. What are the advantages of manufacturing in Europe?
Since the volumes of electric vehicles are currently still manageable, imports from Asia have been made in the past. If electromobility gets off to a good start, then the battery cells must also be manufactured where Volkswagen Group’s electric vehicles are built. Current capacities for battery cells do not yet cover what the market will need in the future. The establishment of battery cell assembly facilities in Europe is therefore an important economic and industrial policy issue for the future of electromobility.
What are the political challenges in developing battery cell production in Germany or Europe?
There are strategic, economic and employment criteria and framework conditions. Decisive criteria for the choice of location are competitive wage costs, favorable tax conditions and – due to the high electricity demand in cell assembly – competitive energy prices. The availability of electricity from renewable energy sources is another relevant factor in making electric vehicles truly sustainable: This would be a prerequisite for battery production being in line with the Volkswagen Group’s climate targets.
What are the economic and political parameters that would make production in Germany attractive for Volkswagen Group?
The attractiveness of potential German locations can be improved by various steps. For example, an exemption from the EEG levy, support for the granting of investment aid and infrastructure measures, measures such as the granting of special depreciation allowances or tax advantages and, last but not least, state support for training or retraining in the region concerned would be conceivable. If the overall package were coherent, Germany would be Volkswagen Group’s first choice for battery production.
What is Volkswagen investing in the E-offensive?
Volkswagen Group is investing heavily in the mobility of the future: one third of the planned development investments will go into electromobility, digitization and new mobility services, totaling around 44 billion euros. Of this total, the Group will spend 30 billion euros exclusively on e-mobility. The joint ventures in China will invest another 15 billion euros over the next few years.
What is the advantage for customers if Volkswagen has the necessary know-how and possibly even operates its own battery cell factory?
One thing is clear for the Volkswagen Group: technological and cost leadership is also being sought in the manufacture of battery cells. Because the Volkswagen brands not only want to offer their customers the best e-vehicles, but also at competitive prices. By 2028, almost 70 new e-models will have been produced across the Group; a total volume of 22 million battery electric vehicles across all brands and kits (MEB, PPE). For the MEB alone, the Volkswagen brand is planning 15 million electric cars on the new electric platform by 2028. This gives the MEB the potential to become the largest and most powerful e-platform in the industry and to become a globally recognized standard. The MEB will also be used by other Group brands. And the platform will be accessible to external partners such as Ford, enabling higher economies of scale. Each additional model reduces costs and increases profitability. Above all, the Group’s customers benefit from this – through superior and affordable e-cars.
What role do batteries play in the added value of a car?
High-capacity, sustainably produced and cost-effective batteries are central to the electrification of automotive drives and thus to the future success and competitiveness of every automobile manufacturer. The heart of every battery is the battery cell, which accounts for a large part of the added value. In the case of the electric car, this accounts for 40 percent of the added value in the vehicle. The importance of battery technology also becomes clear when one considers that in new electric models the vehicle is practically developed around the battery.
Glossary: Battery Manufacturing, Research and Strategy
With a view to the next battery generations: What is the status quo of lithium-ion batteries and the expected development?
Lithium-ion batteries are currently the best technology available on the market and will remain so for at least the next ten years. Since 2014, for example, the energy density of lithium-ion batteries has doubled, making it possible for electric cars to have longer ranges acceptable to customers from the outset. Volkswagen has therefore decided to start its own lithium-ion battery cell assembly. In addition, the further development of the technology is to be strongly promoted.
What is the next battery technology that Volkswagen is relying on?
The next big jump will probably be the solid-state battery. Volkswagen Group is conducting intensive research into this technology together with its partner QuantumScape. Solid-state batteries will have an even greater energy density and thus a greater range than today’s lithium-ion batteries. They are also lighter, cheaper and allow shorter charging times. It will be a few years before they can be used in industrial mass production. The long-term goal is the large-scale production of solid-state cell batteries for the Volkswagen Group fleet.
1 The vehicle is not yet available for sale in Europe