Volkswagen builds battery supply chain with joint venture cathode plant

VOLKSWAGEN’S battery unit and Belgium’s Umicore are setting up a joint venture to invest about 3 billion euros (S$4.16 billion) into new battery materials capacity to feed the growing demand for electric cars. 

The unit, to be based in Brussels, is set to start operation in 2025 to supply a large part of VW’s European battery cell factories with cathode materials, Umicore and VW’s PowerCo said on Monday (Sep 26). By the end of the decade, the JV is aiming to power about 2.2 million fully-electric cars, equivalent of about 160 gigawatt hours. 

“Cathode material is an indispensable strategic resource for battery production, accounting for roughly half of overall cell value,” Thomas Schmall, VW’s technology head and chairman of PowerCo, said in a statement. “Immediate and long-term access to extensive capacity is thus a very clear competitive advantage.”

The search for a production site is still ongoing, while Umicore last week inaugurated a cathode plant in Poland. The announcement advances a pact outlined in December, and the partners also plan to collaborate on the sustainable and responsible sourcing of raw materials. 

Europe’s biggest automaker is establishing six battery plants in the region to enable the industry’s most ambitious rollout of electric cars with a plan for 50 purely battery-powered models by the end of the decade. BLOOMBERG