Volkswagen Group and Gotion High-Tech Co., Ltd. are deepening their partnership. Based on a substantial shareholding agreement in May 2020, Volkswagen Group entered a strategic cooperation framework with the major Chinese battery producer headquartered at Hefei. The goals of both partners are to industrialize the planned battery cell production at the Salzgitter site of Volkswagen Group Components and to develop first use cases of the Volkswagen unified cell concept for the volume segment.

The Volkswagen unified cell concept refers to a prismatic cell format adaptable to various chemistry mixes available today or market-ready at a later point in time. The unified cell is compatible to all major upcoming innovations in both product and production technology.

Both projects are part of the overarching plan of Volkswagen Group to reduce battery complexity and costs significantly while boosting range and charging performance in order to make the electric car still more attractive.

Both sides will team up for fast cell industrialization at the Volkswagen-owned Salzgitter plant with Gotion High-Tech acting as technology partner for the cell factory layout, machinery, and production processes.

In addition, Volkswagen (China) Investment Company Ltd. (VCIC) and Hefei Gotion High-Tech Power Energy Co., Ltd. agreed that Gotion High-Tech will develop the first generation of unified cells for the volume segment. The new activities will not affect ongoing contracts with other battery suppliers.

While the Salzgitter traditional engine plant is consequently transforming, a new battery production cell hub will be built up in partnership with Gotion High-Tech. At the site, a Group-wide Center of Excellence Battery Cell with extensive cell laboratories, a pilot line for cell production, and a pilot plant for battery recycling are the solid foundation for the imminent construction of the cell factory with scheduled start of production in 2025.

In Europe alone, Volkswagen Group will establish six gigafactories with a total production capacity of 240 GWh together with partners in order to secure battery cell supply and achieve large economies of scale implementing the unified cell concept as well as numerous production innovations.

In May 2020, both partners signed binding agreements that Volkswagen (China) Investment Co. Ltd. will become the largest shareholder in Gotion High-Tech, with 26% of the shares, through a buy-in of around €1.1 billion. The transaction has been approved by the China Securities Regulatory Commission (CSRC) and both parties are presently working on closing procedures. Volkswagen is thus the first global automaker to invest directly in a Chinese battery supplier.

Furthermore, Gotion High-Tech is in the process of becoming a certified Volkswagen Group battery supplier in China, including supplies for local MEB vehicles.