Volkswagen & Bosch Form JV For European Battery Production

Volkswagen and Bosch have signed a memorandum of understanding to explore a joint venture dedicated to providing the European market with battery equipment solutions. The two, together, plan on selling integrated battery solutions with on-site ramp-up and maintenance support for battery cell and system manufacturers. This joint venture has also been designed with the goal of enabling Volkswagen to achieve its goal of building six battery cell factories by 2030 which will also be available to third-party customers.

The idea for both Bosch and Volkswagen is to be self-sustaining for electric cars in terms of the supply chain. Volkswagen is building on top of its JV with NorthVolt with which it has planned its first facility in Salzgitter in Germany.

"Europe has the unique chance to become a global battery powerhouse in the years to come," said Thomas Schmall, a VW board member responsible for the automaker's battery plans, in a statement.

Bosch is one of the biggest automotive suppliers in the world

"There is a strong and growing demand for all aspects of battery production, including the equipment of new gigafactories. Volkswagen and Bosch will explore opportunities to develop and shape this novel, multi-billion-euro industry in Europe," he added.

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"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 localized European supply chain for e-mobility made in Europe certainly marks a rare opportunity in business history," Schmall explained.

The European battery alliance has already said that a third of the global batteries need to be manufactured in Europe by the end of the decade to cut dependence on South Korean and Chinese suppliers.