VW and Bosch to industrialise car battery-cell manufacturing

25 January 2022

Volkswagen (VW) Group and Bosch Group are exploring the establishment of a European battery equipment provider. As part of a new memorandum of understanding (MoU) the pair plan to provide integrated production systems. This includes on-site ramp-up and maintenance support for battery-cell and system manufacturers.

Two fundamental shifts within the automotive world are pushing OEMs down a different path from the one they have spent decades travelling. Firstly, electrification has companies dropping internal-combustion engines (ICE) vehicles for ones charged with a plug. This requires new components and fresh factories to build them. VW Group alone plans to build six cell factories by 2030.

The second shift is the cracking of global supply chains. As the flow of essential components like semiconductors ran dry, European production lines ground to halt. Now there is an emphasis on not only building electric but doing so locally. Additionally, by reducing the number of parts shipped across the globe, there should also be a smaller environmental impact. Both companies have agreed to use a ‘local for local’ approach to production, in what they hope will be a step towards carbon-neutral mobility.

Looking to lead

Bosch and VW want to supply all the necessary components and processes needed for the large-scale manufacturing of battery-cell systems. The pair are setting up a project unit to explore the production possibilities, with the goal of establishing a new company by the end of the year.

The firms want to lead the way on cost and technology in the race to industrialise the component technology. They also want to get out ahead in the volume production of sustainable, cutting-edge batteries. If they can take the lead, the market advantage could be highly profitable given demand is sky-high. In Europe, there are already various plans in place to build cell factories with a total yearly capacity of around 700GWh by 2030.

Global battery powerhouse

Among the signatories of the MoU was Thomas Schmall, VW Group’s member of the board of management in charge of technology and CEO of VW Group Components, and Rolf Najork, member of the board of management of Robert Bosch Group and chairman of the executive board of engineering country Bosch Rexroth.

‘Europe has the unique chance to become a global battery powerhouse in the years to come. There is a strong and growing demand for all aspects of battery production, including the equipment of new gigafactories,’ said Schmall. ‘Volkswagen and Bosch will explore opportunities to develop and shape this novel, multi-billion-euro industry in Europe. Our decision to actively engage in the vertical integration of the battery-making value chain will tap considerable new profit pools. Setting out to establish a fully localised European supply chain for e-mobility made in Europe certainly marks a rare opportunity in business history,’ he added.

‘Together with Volkswagen, we seek a path to industrialise production processes for battery cells with standardised equipment. We have the best prerequisites for this: Bosch is not only the world’s biggest automotive supplier, but also one of the leading suppliers of factory equipment,’ said Najork. ‘We understand how battery technology works and know how to manufacture it. With more than 135 years of automotive experience and our proven industrialisation expertise, we want to serve the growing demand for batteries. European industry has the potential to become a technology driver for the ecological transformation of the economy.’