Volkswagen Group has begun production at its first 100% owned battery plant in China. Volkswagen (Anhui) Components (VWAC) will produce high-voltage battery systems to support the carmaker's battery EVs locally.
According to an announcement on November 21, VWAC has an initial annual production capacity of 150,000 to 180,000 high-voltage battery systems. The facility is the first battery system plant invested completely by the Volkswagen Automatic Transmission (Tianjin).
Volkswagen said 96% of the components used in the production are supplied domestically in China. The battery system is composed of cell modules, the cell management controller, the battery management system, and connector strips.
Olaf Korzinovski, executive vice president of Volkswagen Group China, said VWAC is the powerhouse of battery production and essential to the company's future development.
Battery systems produced at VWAC will power Volkswagen Anhui's MEB EVs. The plant, which occupies an area of 45,000 square meters, aims to use 100% renewable energy by 2025. Volkswagen said VWAC is also expected to manufacture the cell-to-pack (CTP) battery packs that consist of unified cells developed with China-based Gotion High-tech. Volkswagen has been a major investor in Gotion.
Volkswagen and other foreign automakers have been lagging behind the fierce EV competition in China as local companies like BYD rise. The start of production at VWAC was a milestone of Volkswagen's "In China, for China" approach and showed its dedication to producing components locally in the country.
The European automaker has been establishing partnerships in China to accelerate EV transition. In July 2023, the Volkswagen brand became a strategic partner of Xpeng, a Chinese EV company. Volkswagen said it will invest about US$700 million in Xpeng. The pair plans to co-develop two BEVs under the Volkswagen brand and aims to begin production in 2026.
Volkswagen Group's Audi also signed a strategic memorandum with China-based SAIC, its joint venture partner, to advance their cooperation. They will co-develop premium EVs.
