By Mauro Orru
Volkswagen AG is establishing a European company for its battery business as it doubles down on efforts to bolster its presence in the fast-growing market of electric vehicles.
The German car maker said Monday that the new company would encompass activities ranging from the processing of raw materials to managing the European gigafactories.
The announcement comes as Volkswagen plans to set up six gigafactories in Europe to meet rising demand for battery cells. The company has set aside 2 billion euros ($2.26 billion) for the construction and operation of its Salzgitter gigafactory up to the start of production, slated for 2025.
The site will bring together development, planning and production control, effectively making Salzgitter Volkswagen's European battery hub.
"We already have a strong battery team in Salzgitter made up of 500 employees from 24 countries--and we are continuing to strengthen this team at leadership level," Thomas Schmall, chief executive of Volkswagen Group Components, said.
Volkswagen has plans for more gigafactories at sites in Spain and Eastern Europe, with more details expected in the first half of 2022. The company hopes to open two more battery cell factories in Europe by 2030.
Write to Mauro Orru at email@example.com; @MauroOrru94
(END) Dow Jones Newswires