Volkswagen starts EV battery production at planned 16GWh factory

German carmaker Volkswagen has begun rolling lithium-ion batteries for electric cars off a small-run pilot line ahead of its new production facility in Salzgitter in Lower Saxony, signalling the start of its plan to deliver 16GWh of EV batteries per annum.

It’s a key step for the automaker which has promised 70 electrified models by 2030 in a concerted effort to make up for the damning decisions that led to the 2015 Dieselgate emissions scandal.

It wants to sell 22 million of these vehicles globally in the next decade, and expects that by that time its sales in Australia will be 50% electric vehicles.

A steady supply of lithium-ion batteries – the kind that are used in laptops, smartphones and most importantly, electric vehicles – is critical to this goal, and with that in mind in the German carmaker announced in early September that it would build a new factory to service that demand.

“The battery cell is the key component for electric mobility. Therefore, Volkswagen and Northvolt are together pushing ahead efficient cell production in Europe to accelerate their joint battery activities,” said member of the Volkswagen AG board Dr. Stefan Sommer in a statement.

“With the founding of the joint venture and the planned construction of a battery cell factory in Salzgitter, we are making a decisive contribution to establishing the core battery cell technology in Germany as well.”

Based in Salzgitter, the factory – which is part of a 50/50 venture between the Volkswagen auto group and battery maker Northvolt – will be strategically placed halfway between its Zwickau factory where it will produce its first ID series electric vehicle, the ID.3 hatchback.

Initial capacity for the production facility, construction for which is planned to commence in 2020, will be 16GWh annually.

CEO of the joint venture between Volkswagen AG and Northvolt Fredrik Hedlund said in a statement that: “Building a gigafactory in Germany together with Volkswagen allows Northvolt to further increase the production capacity of green battery cells with a minimal CO₂ footprint. This will have a significant impact on electrification in Europe.”

It is worth noting that the Volkswagen AG’s estimated total battery demand across its brands will amount to some 150GWh in Europe alone, and the same again in Asia. In that light, the Salzgitter factory will account for just over 5% of EV battery demand for the auto group.

All in all, Volkswagen is investing €30 billion ($A48.7 billion) in its electrification strategy.