The Volkswagen Group has begun development, testing and production of battery cells technology in Salzgitter, Germany, where it plans to create 1,000 jobs by 2023/2024.
Three hundred posts will be at the development centre and pilot line and 700 at a joint venture between Northvolt and the automaker to build and operate a battery cell factory.
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The project will cost EUR1bn.
VW on Monday (23 September) opened a pilot line for small series battery cell production was opened at the 'centre of excellence' (CoE) in Salzgitter today.
The initial 300 workers are now developing, testing and piloting manufacturing technology for lithium-ion batteries.
In this first step, VW itself is spending EUR100m to acquire development and production knowledge.
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By GlobalDataIt is spending EUR900m on the 50/50 battery JV with Swedish producer Northvolt.
Construction of a 16 gigawatt hour battery cell factory in Salzgitter will start in 2020 with production commencing late in 2023 or early 2024. That venture will add 700 more jobs in the medium term in the independent joint venture.
VW Group procurement head Stefan Sommer said: "Bringing together the development, testing and pilot production of battery cells in Salzgitter marks a further milestone in the 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."
The group concurrently has established a battery cell business area at its Group Components operation, intended to optimise battery cells for future use in group electric models in cooperation with suppliers.
VW itself will work on increasing capacity to extend EV range, reducing use of scarce raw materials and optimising sustainable manufacturing processes and recycling entire battery systems.
Group components chief Thomas Schmall said: "We already develop and manufacture power electronics, battery systems, electric motors and charging systems, and are building up battery recycling [knowledge].
"With the integration of the battery cell business area, Group Components is on track to becoming a globally leading producer of e-mobility components."
Frank Blome, head of the battery cells unit in Salzgitter, added: "Today's commissioning of the pilot line is an important step on the road to building a gigafactory at [this site].
We will further deepen our knowledge of production processes within a short space of time. That is important in order to shape future developments and thus secure performance and costs as well as quality. The experience gained will also contribute to mastering the entire value chain for lithium-ion batteries from raw materials through production to recycling."
A battery recycling pilot line under construction in Salzgitter should begin operating in 2020.
