The Volkswagen Group has begun operations for small-series battery cell production at its newly-opened Centre of Excellence in Salzgitter, Germany, with around 300 experts involved in developing, testing and piloting manufacturing technologies for the production of lithium-ion batteries.

Preliminary investments include an injection of 100 million euros (RM459 million) to amass its own development and production know-how, while an additional 900 million euros (RM4.13 billion) will be invested with Swedish battery maker Northvolt in joint battery activities.

Construction of a 16 gigawatt hour battery cell factory in Salzgitter will start in 2020, and the plant is expected to be fully operational in late 2023 or early 2024. The two entities have already formed a 50:50 joint venture for this, with 700 jobs to be created in the medium-term.

Volkswagen AG board member for procurement, Dr Stefan Sommer said: “Bringing together the development, testing and pilot production of battery cells in Salzgitter marks a further milestone in the Volkswagen Group’s comprehensive electric offensive. By pooling know-how at this site, we are making sure we drive forward our own activities to further advance the development of battery cells as a key component in electrification, develop new standards and swiftly transition them to series production.”

A new battery cell business area has also been established within Volkswagen Group Components. The division is tasked with optimising battery cells for future use in the group’s electric vehicles, with spectrum ranging from increasing capacity to reducing the use of scarce raw materials and optimising sustainable manufacturing processes through to recycling battery systems.

Salzgitter plant chief, Frank Blome said the pilot line will help deepen knowledge of battery production processes, one that will contribute to mastering the entire value chain for lithium-ion batteries – from raw materials through production to recycling. A battery recycling pilot line is also under construction in Salzgitter and is slated to begin operating in 2020.