VW's PowerCo & Umicore Establish Joint Venture for European Battery Materials Production

PowerCo, the new battery company of the Volkswagen Group, and Umicore, the Belgian circular materials technology group, have announced the founding of a joint venture (JV) for precursor and cathode material production in Europe. From 2025 onwards, the JV will supply PowerCo's European battery cell factories with key materials.

By the end of the decade, the partners aim to produce cathode material and their precursors for 160 GWh cell capacity per year, which compares to an annual production capacity capable of powering about 2.2 million full electric vehicles.

At a later stage, based on Umicore’s technology and know-how, both partners aim to include elements of refining and battery recycling into the scope of the JV.

Production at the JV is scheduled to start in 2025 to supply PowerCo’s Salzgitter factory, reaching an annual capacity of 40 GWh in 2026. 

Cathode active materials are crucial for for EV battery performance, as well as the biggest single contributor to overall battery cost.

Thomas Schmall, Group Board Member for Technology at Volkswagen AG and Chairman of the Supervisory Board of PowerCo SE, says: "Cathode material is an indispensable strategic resource for battery production, accounting for roughly fifty percent of overall cell value. Immediate and long-term access to extensive capacity is thus a very clear competitive advantage. We are setting up a sustainable, transparent supply chain with high environmental and social standards, localizing value creation here in Europe.”

Umicore CEO, Mathias Miedreich, adds: "This partnership is a strong signal of recognition of our product and process expertise and a testament to the success of our strategy to establish sustainable industrial-scale, closed loop battery materials value chains in key regions. We are supporting our customers on their path to electrification right from the start, and are very pleased to partner with PowerCo and support Volkswagen in their fast transformation towards sustainable electric mobility.”

PowerCo CEO, Frank Blome, comments: "The availability, cost and technical performance of battery cells are key requirements for the successful ramp-up of e-mobility. By building up substantial production capacities, we are securing the rapidly growing demand for battery-grade materials for our main customer Volkswagen AG in terms of volume and at optimal cost."

The partnership will provide VW's PowerCo, at significant scale, with secure and cost-competitive access to Umicore’s innovative, sustainably sourced and tailored high-performance battery materials for its unified cell strategy in Europe.