With the company aiming to achieve half of its sales with electric vehicles by 2030, Volkswagen (VW) has recently made major changes in this direction. VW has already started manufacturing mainstream all-electric cars like the ID3, for which the company relies on importing battery cells from China.

They don’t want to completely change this business model, but the German brand is planning to start producing its own battery cells in Salzgitter. Salzgitter is an independent city in southeast Germany that is known for its steel industry.

Volkswagen intends to set up a pilot line for cell production and a pilot plant for battery recycling, which will serve as a solid foundation for the construction of the cell factory, which is expected to begin construction by 2025. VW is looking for a partnership with Gotion High-Tech, one of the largest manufacturers of lithium batteries in China.

The company that went public in 2015 was also the first power battery company to go public. This is the first time a global automaker has invested directly in a Chinese battery supplier. As European and American automobile brands move towards electrification, we will likely see this happen more frequently in the future.

“With our state-of-the-art battery technology and extensive experience in battery production, Gotion High-Tech will fully support the Volkswagen Group‘s electrification strategy and jointly drive the climate-neutral transition by 2050 in order to completely change the dependence of human society on fossil fuels. I firmly believe that this collaboration will be a successful model of Sino-European trade and economy as well as the global strategy for new energies, ”said Zhen Li, CEO of Gotion High-Tech.

In May, the two companies signed an agreement whereby VW Investment Co. will become the largest shareholder in Gotion High-Tech. VW Investment Co. will acquire 26% of the shares through a buy-in of around 1.1 billion euros.

Both partners are currently working on the process of the deal. Gotion High-Tech will be a certified battery supplier to the VW Group and will supply the components that are required for the construction of the German manufacturer’s MEB (Modular Electric Vehicle Platform).

Before the standardized cell is developed and produced in large numbers, the VW Group must rely on existing battery suppliers. VW’s long-term goal is to become one of the three largest battery cell manufacturers in the world, following the ambitious goals of the CEO.

This is particularly interesting to see that the major automakers around the world are complying with the new European Union laws to go green and achieve net zero carbon emissions by 2050.