With a total investment of 23.2 billion, Volkswagen’s cathode material project was launched

On October 6, Volkswagen Group officially announced that its joint venture battery materials company will be named IONWAY. The company is jointly established by PowerCo, a battery business company of the Volkswagen Group, and Umicore, a Belgian materials technology company, and will be headquartered in Brussels, the capital of Belgium.

This means that after one year, the joint venture plan between PowerCo and Umicore has been officially implemented.

Image source: Volkswagen Group

On September 26, 2022, the two parties announced that they would establish a joint venture in Europe and jointly invest 3 billion euros (approximately RMB 23.192 billion) to produce battery precursors and cathode materials starting in 2025. Furthermore, both parties stated that they would equally share costs, investments, revenues and profits.

According to the plan, the joint venture aims to reach 160GWh of battery precursor and cathode material production capacity by 2030. The first factory is located in Nysa, Poland, adjacent to Umicore's existing cathode materials factory, making it easier to obtain raw materials from Umicore's refinery in Finland. The plant aims to start production in 2025.

It is worth noting that the Volkswagen Group pointed out in its statement that IONWAY will produce customized high-performance cathode materials and corresponding precursors and supply them to PowerCo's European super battery factory.

Three Gigafactory plans have been identified

On July 13, 2021, the Volkswagen Group released the 2030 NEW AUTO strategy to accelerate its transformation into a software-driven mobility service provider.

In terms of battery supply, Volkswagen said it plans to establish a self-controlled battery supply chain by establishing new partnerships and covering all areas from raw materials to recycling.

A year later in July, Volkswagen officially announced that PowerCo would be responsible for its global battery business and planned to build six battery factories in Europe, with a total planned production capacity of 240GWh by 2030.

However, foreign media reported in November last year that Volkswagen brand CEO Thomas Schäfer said that if EU policymakers cannot control rising energy prices in the long term, the company’s investments in industrial projects such as battery factories in Germany and the EU will not be possible. conduct.

Since then, Volkswagen has been rumored many times to have postponed its plans to advance battery factories in Europe and is actively building battery factories in North America. On March 31 this year, Volkswagen confirmed the news - it officially announced that it would build a battery factory in St. Thomas, Ontario, Canada.

The plant is expected to start construction in 2024 and be completed in 2027. After completion, the annual production capacity will be as high as 90GWh. The Canadian government and the Volkswagen Group will jointly invest 20 billion Canadian dollars, of which the Volkswagen Group plans to invest up to 7 billion Canadian dollars by 2030.

Currently, PowerCo has only identified two European gigafactories, namely Salzgitter, Germany and Valencia, Spain.

Among them, the battery factory in Salzgitter, Germany, will become the European battery center of the Volkswagen Group, with an initial investment of approximately 2 billion euros and an annual production capacity of 40GWh. The battery factory will cooperate with Guoxuan Hi-Tech to develop standard batteries and plans to start mass production in 2025. It will produce batteries for the Volkswagen, Skoda and Seat brands of the Volkswagen Group. The factory has officially started construction in July 2022.

The battery factory in Valencia, Spain, will be built jointly with its SEAT brand, with an annual production capacity of 40GWh.

Although the third Gigafactory is located in Canada, when announcing the establishment of IONWAY, Volkswagen reiterated its goal of building a total battery production capacity of 240GWh by 2030.

Distribution and control supply chain

Volkswagen plans to establish a fully self-controlled battery supply chain. In addition to the battery main body, Volkswagen has already in-depth control of all links.

On the material side, in March 2022, Volkswagen China signed two strategic cooperation memorandums of understanding with Huayou Cobalt and Tsingshan Holding Group. The first is to form a joint venture between the three parties to develop nickel and cobalt resource development business in Indonesia. The planned construction scale of the joint venture is to produce approximately 120,000 tons of nickel metal and approximately 15,000 tons of cobalt metal annually, which can meet the supply of nickel and cobalt raw materials required for approximately 160GWh batteries.

The second is that Volkswagen China and Huayou Cobalt plan to establish a joint venture in Guangxi and other places to engage in nickel cobalt sulfate refining, ternary precursors and ternary cathode material production, etc., to jointly create internationally competitive new energy lithium battery materials Integrated manufacturing platform.

In addition, Volkswagen China is the largest shareholder of Guoxuan High-tech. In addition to meeting the battery needs of the group's electrification transformation, it is also expected to receive raw material support from Guoxuan High-tech. Currently, Guoxuan Hi-Tech has a presence in iron phosphate, ternary precursors, anode materials, separators, copper foil, etc.

On the recycling side, in July 2022, the American battery recycling company Redwood Materials and Volkswagen reached an agreement to directly cooperate with Volkswagen's more than 1,000 dealer networks in the United States to recycle Volkswagen and Audi's electric vehicle batteries.

On the equipment side, Volkswagen has signed a cooperation agreement with Pioneer Intelligence. Pioneer Intelligence will provide 20GWh lithium battery equipment solutions for Volkswagen's Salzgitter plant. At the same time, Leading Intelligence will also become the core equipment supplier for the Volkswagen Group's subsequent construction of a 240GWh power battery factory in Europe.