August 23, 2024 05:42 AM

VW scales back plans for battery cell plants in Europe, North America

VW has started construction on two Europe factory sites in Germany and Spain and early works are underway at a third site in Ontario, Canada.

Staff and wire reports

VW

VW's future battery cell plant in St. Thomas, Ontario.

Volkswagen is scaling back its battery cell factory plans in Europe and North America due to a recent slump in the electric-vehicle market.

"The expansion of the plants will depend on how the market for e-cars develops," Chief Technology Officer Thomas Schmall told Frankfurter Allgemeine Sonntagszeitung (FAS) in an interview.

In 2021, VW said it planned to have six battery cell plants by 2030 with an annual production capacity of 240 gigawatt hours to secure supply for its electric-vehicle push.

VW's PowerCo battery division has started construction on two factory sites in Europe. Output is due to start in Salzgitter, Germany, next year and in 2026 in Spain. Early works are underway at a third site in Ontario, Canada.

Schmall said VW has reallocated capacities and is building fewer battery factories, but a very large one in Ontario, Canada.

"We are currently planning to produce up to 170-gigawatt hours at the three sites in Salzgitter, Valencia and Ontario," he told Frankfurter Allgemeine Sonntagszeitung.

If necessary, VW can easily expand the sites in Valencia and Ontario to reach its original 2030 target of 200-gigawatt hours, Schmall said.

Expansion in Salzgitter would be difficult for space reasons, he added.

"I do not yet know whether the expansion in Spain and Canada will happen. But it is certainly feasible in the six years up to 2030 if it is needed," Schmall said.

He declined to say whether VW will produce lithium-iron phosphate, or LFP, cells in Salzgitter. LFP batteries have a lower cost than batteries with nickel manganese cobalt (NMC) chemistry. LFP batteries are key to European automakers producing affordable full-electric cars to compete with Chinese rivals.

Schmall said VW will begin producing solid-state batteries this decade. Solid-state batteries give EVs a longer range and faster charging.

VW announced in July a deal to mass-produce solid-state battery cells based on QuantumScape technology.

Reuters contributed to this report