Volkswagen’s Electrification Ambitions Get a Boost
Securing Supply Chains for a Greener Future
Volkswagen Group’s subsidiary, PowerCo SE, has taken a significant step towards achieving its electrification goals by inking a five-year battery raw materials supply deal with Australia-based Novonix. The agreement, announced on November 24, will see Novonix supply PowerCo with at least 32,000 tonnes of synthetic graphite material for EV battery production, starting in 2027.
A Key Partnership in the Making
The synthetic graphite material will be manufactured at Novonix’s Riverside facility in Chattanooga, Tennessee, which is slated to begin commercial production in 2025. This partnership marks a crucial milestone in Volkswagen’s efforts to boost battery cell production globally, following the establishment of PowerCo in 2022.
PowerCo’s Ambitious Plans
PowerCo oversees international factory operations, cell technology development, and the vertical integration of the battery value chain. The company plans to open three gigafactory locations in Germany, Spain, and Canada, with a combined capacity of up to 200 GWh/year. The German factory is expected to go online first in 2025.
Strategic Partnerships Drive EV Development
Volkswagen has also secured other strategic partnerships to advance EV development, including a joint venture with Rivian Automotive to develop shared electrical/electronic architecture and software for EVs. Additionally, PowerCo and battery startup QuantumScape signed an agreement to mass produce batteries for Volkswagen EVs.
A Boom in Battery Material and EV Projects
The push to boost battery production is driven by the need to meet electric vehicle assembly needs, despite a slowdown in consumer demand for EVs. The Biden administration’s tariffs on China-made goods, including components for EVs and raw materials for batteries, have heightened incentives for domestic battery sourcing.
Novonix Expands Capacity to Meet Demand
In addition to its Riverside facility, Novonix is planning to build a second battery materials plant in the Southeast, with an initial capacity of 30,000 tonnes annually. Production will eventually be expanded to 75,000 tonnes a year. Novonix has also signed a four-year deal with Panasonic Energy for 10,000 tons of synthetic graphite, starting in 2025.
The Future of Electric Vehicles
As the automotive industry continues to shift towards electrification, securing supply chains and partnerships will be crucial in meeting the growing demand for EVs. Volkswagen’s agreements with Novonix and other partners demonstrate its commitment to driving innovation and sustainability in the industry.
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