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Volkswagen Group's New Battery Factory in Hefei, China Begins Construction
Volkswagen Group's new battery factory in Hefei, China, has commenced construction as part of a broader, strategic electric vehicle (EV) and battery production hub. The factory, wholly owned by Volkswagen Group in China, will produce battery systems for Volkswagen's MEB (Modular Electric Drive Toolkit) plant in Anhui, supplying pure electric vehicles in Asia, Europe, and the United States.
The factory, spanning over 45,000 square meters, is strategically located adjacent to Volkswagen's Anhui MEB factory. It will employ cutting-edge technology, achieving a high degree of automation in the battery production process. The Group's Tianjin plant will provide professional training to the new facility.
Volkswagen Group (China) plans to invest more than 140 million euros in constructing the new plants and supporting facilities until 2025. The initial annual production capacity of the plant is expected to be between 150,000 to 180,000 sets of high-voltage battery systems.
Hefei, a city heavily supported by Chinese government and local policies, has emerged as a strategic EV manufacturing hub. The region boasts a concentrated cluster of more than 30 battery suppliers within a 2 square kilometer zone near major EV plants such as Mercedes-Benz’s and Volkswagen’s facilities. This concentration supports rapid development and supply chain integration.
The battery production projects in the Hefei area emphasize lithium iron phosphate (LFP) cell technology for energy storage and EVs, with new production lines in the region targeting gigawatt-hour capacities. Volkswagen is integrating with local suppliers specialized in LFP battery technology and potentially newer solid-state battery advancements.
Front-line employees at the new factory will receive virtual reality technology training to reduce parts loss and accident risks. The plant is expected to be operational by the second half of 2023. The group's parts plant in Tianjin has already begun production of the prototype battery systems for the new Hefei plant.
The VW Anhui Components Company, adjacent to Volkswagen Anhui's V-production site, will start operations with about 200 employees. Dr. Stephan Wöllenstein, CEO of Volkswagen Group China, emphasized the importance of battery systems and other key issues in the electric mobility era. Thomas Schmall, a member of the board of directors of Volkswagen Group, stated that the development and production of battery systems is a critical step in achieving end-to-end responsibility for the battery.
The Hefei battery factory and ecosystem are expected to expand alongside growing EV production there, building on existing technology and supply chain advantages. Volkswagen is investing and scaling battery production globally, working with advanced battery technologies, including partnerships like with QuantumScape for solid-state batteries. The group aims to increase battery production capacity dramatically, aligning with global EV ramp-up forecasts and exploring cutting-edge solid-state battery technology for future models.
- The new battery factory, built as part of Volkswagen Group's broader electric vehicle strategy, is anticipated to provide financing for the production of battery systems, enabling the automotive business to produce new energy vehicles for transportation in Asia, Europe, and the United States.
- As the battery industry continues to advance, Volkswagen Group is partnering with local suppliers in Hefei, China, who specialize in lithium iron phosphate (LFP) battery technology and potentially solid-state battery advancements, integrating these technologies into their new battery production facility.
- The expansion of technology in electric vehicles is not limited to supply chain advancements; front-line employees in the new battery factory will receive training using virtual reality technology to minimize parts loss and accident risks, demonstrating the Group's commitment to business innovation in the electric mobility era.
