PowerCo forms a joint venture with Umicore for EV battery materials production in Europe.

Volkswagen’s new battery company PowerCo has established a joint venture with Umicore, the Belgian circular materials technology group for battery material production in Europe. The joint venture will produce cathode material and supply it to PowerCo’s European battery cell factories.

Production at the JV is scheduled to start in 2025 to supply PowerCo’s Salzgitter factory, reaching an annual capacity of 40 GWh in 2026. Both partners target to grow the JV‘s annual production capacity to 160 GWh by the end of the decade, which will power up to 2.2 million fully electric vehicles.

Umicore and PowerCo will collaborate on the sustainable and responsible sourcing of raw materials, an area in which Umicore is an industry leader. In this context, Umicore will be also providing refining services to PowerCo. At a later stage, based on Umicore’s technology and know-how, both partners aim to include elements of refining and battery recycling into the scope of the JV.

Both companies will jointly control the JV and will equally share costs, investments, revenues, and profits. The JV will give both partners a significant first-mover advantage in the fast-growing e-mobility market in Europe. Together they plan to invest EUR 3 billion into new materials production capacities.

Thomas Schmall, Group Board Member for Technology at Volkswagen AG and Chairman of the Supervisory Board of PowerCo SE, said at the signing of the JV: “Cathode material is an indispensable strategic resource for battery production, accounting for roughly fifty percent of the overall cell value. Immediate and long-term access to extensive capacity is thus a very clear competitive advantage. We are setting up a sustainable, transparent supply chain with high environmental and social standards, localizing value creation here in Europe.”

PowerCo CEO Frank Blome commented during the contract signing: “The availability, cost, and technical performance of battery cells are key requirements for the successful ramp-up of e-mobility. By building up substantial production capacities, we are securing the rapidly growing demand for battery-grade materials for our main customer Volkswagen AG in terms of volume and at optimal cost.”

Ralph Kiessling, EVP Energy & Surface Technologies at Umicore: “Through this agreement, we are bringing in our long-standing and proven expertise in the battery materials value chain, while gaining secured access to substantial sales volumes. Moreover, the JV will unlock significant cost and operational synergies with the Umicore Group, hereby strongly contributing to Umicore’s 2030 Return on Capital Employed ambitions expressed at our recent Capital Markets Day.”

Also Read:LG Energy Solution partners with three Canadian battery material suppliers.

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