Volkswagen’s PowerCo forms new Partnership to Manufacture Battery Materials in North America

PowerCo, the new battery company of Volkswagen, announced that it will be forming a joint venture with Umicore to manufacture battery materials for around 2.2 million electric vehicles. This new joint venture is a significant milestone in establishing one of the first fully integrated automobile supply chains as Volkswagen plans to ramp up electric vehicle sales in North America.

As demand for electric vehicles continues to soar in all major automobile markets, including the US, China, and Europe, automobile companies are scrambling to keep up with the growing demand. Many automobile companies are already sold out of the popular electric car models for the year.

Since the Inflation Reduction Act was passed in August 2022, automobile companies from around the world have rushed to secure deals to produce critical battery materials in North America. The new joint venture of Volkswagen with Umicore focuses on the home market of Volkswagen in Europe, where the automobile company expects to overtake Tesla in electric vehicle sales by 2025.

With PowerCo planning to build six battery factories in total, it still requires significant amount of minerals to keep up with the production. In July, 2022, Umicore is planning to build a manufacturing facility in Canada for cathode active battery materials (CAM), which are important for electric vehicle battery performance and one of the most costly components.