Volkswagen’s PowerCo Battery Plans

BERLIN (Reuters) – Volkswagen’s PowerCo battery subsidiary will only build one of the two planned production lines at its Salzgitter plant in Germany due to slowing demand for electric vehicles.

Group technology chief Thomas Schmall revealed at a staff meeting that only one production line, with a capacity of 20 gigawatt hours, is under construction, leaving plans for a second line on hold. A spokesperson from the works council voiced concerns, stating, “This is a clear declaration of war on the factory’s staff,” fearing the second line may be scrapped amid cost-cutting measures.

This week, Volkswagen conducted multiple staff meetings after announcing potential plant closures and the removal of job guarantees, emphasizing a need to “turn things around” in 1-2 years.

While Volkswagen previously aimed for the Salzgitter plant to scale up to 40 gigawatt hours per year, no specific timeline has been provided. As of now, production at Salzgitter is still scheduled to begin in 2025, according to a PowerCo spokesperson, who added that any further capacity expansion will depend on market demand.

PowerCo’s three plants—Salzgitter, Valencia (Spain), and Ontario (Canada)—are designed for a combined capacity of up to 170 gigawatt hours. Schmall mentioned that the plants in Spain and Canada could see expansions, but the timing remains uncertain.