The Volkswagen Group is forging new alliances for the production of “made in Europe” batteries, broadening its expertise in lithium-ion cells and batteries.
A technological transition such as the shift from the internal combustion engine to the electric motor is a complex process. If, in the midst of that change, a pandemic arrives — and, linked to it, a supply chain crisis for raw materials — the situation becomes even more challenging. In a nutshell, that is the picture of the moment the global automotive industry is going through. This is also why major groups such as Volkswagen are moving to build an alternative future. Observers and economists have repeatedly stressed that, today, it is no longer enough to design and develop cutting-edge electric cars. A 360° approach is needed, encompassing, among other things, the direct production of batteries. Subject to one now indispensable condition: that every process takes environmental and economic sustainability into account.
Batteries are the true heart of an electric car; key factors such as range and charging speed depend on their efficiency. But so do performance, comfort and driving pleasure. The Volkswagen Group's efforts are moving in the direction of developing all the knowledge needed to design and build them in-house. With precisely this in mind, it has forged numerous strategic alliances, with Umicore, 24M Technologies and Vulcan Energy Resources, to name but a few.
Not only that: the supply chain crisis has highlighted that the globalisation model can translate into delays or even the suspension of production. This is why the trend is towards meeting the battery needs for electric mobility by producing them in-house, in Europe, in the name of greater independence from external suppliers — in this specific case, from Asian manufacturers.
Cathode materials are fundamental to the plants in which battery cells are produced. It is against this backdrop that the agreement between Volkswagen AG and Umicore — a Belgian company specialising in materials technology — should be read; it provides for the establishment of a joint venture for the ethical and sustainable sourcing (from both an environmental and an economic standpoint) of the materials needed to build batteries. The intention is to gradually increase the joint venture's production capacity, starting in 2025 with the gigafactory in Salzgitter, for which an initial capacity of 20 GWh per year is planned. The ultimate goal, meanwhile, is to reach an annual production capacity of up to 160 GWh by 2030 — that is, enough to power approximately 2.2 million fully electric vehicles.
Ambitious targets, yet to be achieved. But the German managers are already looking further ahead: Volkswagen AG and Umicore will evaluate the possibility of integrating activities related to cell recycling and refining into the joint venture. The goal is to create a European supply chain for batteries.
24M Technologies is a start-up that originated as a spin-off from the Massachusetts Institute of Technology (MIT) in Boston. The aim of the partnership with the Volkswagen Group is to industrialise the semi-solid process (as opposed to the dry-coating process) for battery production. The advantage of this solution is cost reduction, thanks to the elimination of certain steps and the use of a smaller quantity of material.
The Volkswagen Group is also focusing on the impact of extracting the raw materials needed to manufacture batteries. To this end, it has signed an agreement for the supply of carbon-neutral lithium from Vulcan Energy Resources, a German company holding numerous projects and initiatives aimed at decarbonising components destined for electric vehicles, such as the Zero Carbon Lithium initiative dedicated to batteries.
Thanks to this project, it will be possible to obtain lithium from a so-called geothermal brine in the Rhine Valley, in Germany. Among the benefits is also the elimination of fossil fuel use across all stages. The contract signed between the Volkswagen Group and Vulcan Energy Resources, lasting 5 years, will, from 2026, make available a quantity of lithium sufficient to meet the in-house production of battery cells in Germany and Europe.