VW Group and Bosch have signed a Memorandum of Understanding (MoU) to explore the possibility of establishing a European battery equipment solution provider by the end of this year.

The two companies plan to supply integrated battery production systems, on-site ramp-up, and maintenance support for battery-cell and battery-systems manufacturers. The say they are aiming for cost and technology leadership in industrial-scale battery technology and the volume production of ‘sustainable, cutting-edge batteries’.

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Through the “local for local” production approach, it is also claimed the move is a step toward the objective of carbon-neutral mobility. In Europe alone, the Volkswagen Group plans to build six cell factories by 2030.

The MoU was signed by Rolf Najork, member of the board of management of Robert Bosch GmbH and chairman of the executive board of Bosch Rexroth, and Thomas Schmall, member of the board of management of Volkswagen Group responsible for technology and CEO of Volkswagen Group Components.

In Europe alone, various companies plan to build cell factories with a total annual capacity of around 700 gigawatt hours by 2030.

The partnership will draw on complementary areas of expertise: while Bosch has excellent know-how in factory automation and systems integration, Volkswagen is an accomplished at scale automaker and is on its way to becoming a major battery cell manufacturer.

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Rolf Najork said: “Together with Volkswagen, we seek a path to industrialize production processes for battery cells with standardized equipment. We have the best prerequisites for this: Bosch is not only the world’s biggest automotive supplier, but also one of the leading suppliers of factory equipment. We understand how battery technology works, and know how to manufacture it. With more than 135 years of automotive experience and our proven industrialization expertise, we want to serve the growing demand for batteries. European industry has the potential to become a technology driver for the ecological transformation of the economy.”

Thomas Schmall commented: “Europe has the unique chance to become a global battery powerhouse in the years to come. There is a strong and growing demand for all aspects of battery production, including the equipment of new gigafactories. Volkswagen and Bosch will explore opportunities to develop and shape this novel, multibillion-euro industry in Europe. Our decision to actively engage in the vertical integration of the battery-making value chain will tap considerable new profit pools. Setting out to establish a fully localized European supply chain for e-mobility made in Europe certainly marks a rare opportunity in business history.”

Both partners have formed a project unit with the target to prepare the establishment of the new company by the end of 2022.