Volkswagen breaks ground on first of six battery factories

The Volkswagen Group broke ground on the first of six battery factories it expects to build in Europe.

The value chain from raw materials to recycling will be managed by Power Co., a new company created by Volkswagen. The factory in Germany and five others planned for Europe are expected to cut battery costs by half, a key competitive advantage, as the global market for EV's intensify.

Volkswagen is trying to increase EV production around the world. Volkswagen announced plans to grow its business in China with some major investments and a hiring spree for CARIAD, its in-house automotive software arm.

The standardized model for future factories will be made easier by Volkswagen's plan to start battery cell production at the Salzgitter factory. Power Co is considering expanding its model to North America after locating its second cell factory in Valencia, Spain. The locations of the other European factories have not been made public.

Volkswagen Group's international factory operations, develop cell technology, vertically integrate the value chain and supply the factories with machinery and equipment will be managed by Power Co. The plant is expected to provide half a million electric vehicles. 3 million EV could be supplied by the new factories.

Up to 20,000 people will be employed in Europe by Powerco and partners, according to Volkswagen. Storage systems for the energy grid are one of the additional projects.

The launch of the company is a strategic milestone.

In terms of technical and economic terms, establishing our own cell factory is a mega project. The technology of the future is coming to Germany.