Volkswagen’s PowerCo and materials technology firm Umicore announced a 3 billion euro ($2.9 billion) joint venture on Monday that will produce battery precursor and cathode material from 2025, likely at Umicore’s new plant in Poland.
They will equally share costs, investments and profits in the joint venture which aims to produce enough material for batteries with 160 gigawatt hours (GWh) of capacity by the end of the decade.
The venture will start with a target of 40 GWh by 2026, with Volkswagen’s Salzgitter battery plant the first to receive material.
There is a “strong industrial logic” to locating production at Umicore’s newly inaugurated battery materials plant in Nysa, Poland, Umicore CEO Mathias Miedreich said, adding a decision would be taken “rather quickly”.
Umicore said last week it saw potential to increase the capacity of the plant, which began production in July, to over 200 gigawatt hours in the second half of the decade, enough to power around 3 million electric vehicles.
The companies agreed that Umicore would refine cathode material for 60 GWh of capacity, Umicore’s CEO said on a call with analysts, with the aim to later add recycling to the remit of the joint venture.
Volkswagen, which plans to build six battery plants in Europe by 2030 starting with Salzgitter, first announced in late 2021 that it was planning a joint venture with Umicore as it attempts to gain control over the entire battery value chain.
Shares in the Belgian company plummeted in June after it announced a 5 billion euro plan to bulk up its battery material business, with analysts concerned about the higher debt and external funding required amid rising costs.
(Reporting by Victoria Waldersee; editing by Rachel More and Jason Neely)
