Volkswagen begins building its first battery factory in Europe

German car group Volkswagen on Thursday started building its first home factory for batteries for electric cars in Europe. The factory is being built near Salzgitter, Germany. The company also has plans for European battery factories. It involves investments of more than 20 billion euros.

The factories are being built by PowerCo, a new Volkswagen subsidiary. Construction began in Salzgitter with the official groundbreaking ceremony in the presence of, among others, President Olaf Scholz and Volkswagen CEO Herbert Diess. Schales said it was important for carmakers to become less dependent on Asian suppliers for batteries for electric cars.

Located in the state of Lower Saxony, Salzgitter already has a factory for Volkswagen engines. The battery factory should start production in 2025 and employ 5,000 workers. Batteries for half a million electric cars must be manufactured each year.

Volkswagen also plans to build plants in the US, targeting battery plant locations in Sweden and Spain. By the end of this decade, PowerCo should have a turnover of more than 20 billion euros and employ up to 20,000 people in Europe.