Investigation
Volkswagen Opens New Battery Factory in Hefei, China
Volkswagen Group has taken a significant step in its strategic expansion in China with the opening of a new battery factory in Hefei. The plant, wholly owned by the company, is part of Volkswagen Group's commitment to local innovation and production capacity expansion.
The factory, covering more than 45,000 square meters, is adjacent to Volkswagen's Anhui MEB factory. It will initially employ around 200 people before ramping up production. Volkswagen Group (China) has invested more than 140 million euros in constructing the new plant and supporting facilities until 2025.
The battery system for MEB platform vehicles consists of multiple battery cell modules, a cell management controller, battery management systems, and a connector strip. The production process at the Hefei plant will adopt the most cutting-edge technology and achieve a high degree of automation at each stage.
Volkswagen Group's investment in the Hefei factory amounts to around $2.3 billion, starting in 2021. Additionally, VW has invested heavily in a 3.5 billion-euro (about $4.1 billion) engineering center in Hefei, focusing on R&D. The new factory will supply batteries for Volkswagen Anhui's all-electric models.
While exact gigawatt-hour (GWh) capacity figures specific to the Volkswagen battery factory in Hefei are not detailed, the investment relates to advanced battery cell lines, including plans to convert some lines to produce lithium iron phosphate (LFP) batteries, a key technology in EV batteries, starting later in 2025.
The new factory will synergize with the Group's holly-owned battery plant and workshops in Braunschweig (Germany) and a component plant in Tianjin (China). The prototype battery systems production has already begun at the Group's parts plant in Tianjin.
Volkswagen Group China aims to have new energy vehicles account for more than 40% of its brand models by 2030. The initial annual production capacity of the Hefei plant is between 150,000 to 180,000 sets of high-voltage battery systems. The new battery factory in Hefei aims to become the strategic pillar of Volkswagen Group's electrification strategy, providing battery systems for all of its electric models.
Experts from Germany will provide support for the international facilities currently being set up, including in Anhui. The new plant will improve logistics efficiency, reduce costs, and speed up the launch of electric vehicle products. The new plant covers more than 45,000 square meters, which is equivalent to the size of 8.4 football fields.
Volkswagen Group has always been committed to the training and developing talents of younger generations. The new factory will provide dual vocational education opportunities. The development and production of battery systems is a critical step in achieving end-to-end responsibility for the battery, according to Volkswagen Group. The plant is expected to be operational by the second half of 2023.
[1] Volkswagen Group. (2021). Volkswagen invests 15 billion euros in the development and expansion of battery cell production. Retrieved from https://www.volkswagen-newsroom.com/en/press-releases/2021/volkswagen-invests-15-billion-euros-in-the-development-and-expansion-of-battery-cell-production
[5] Volkswagen Group. (2021). Volkswagen invests 3.5 billion euros in a new research and development center in Hefei, China. Retrieved from https://www.volkswagen-newsroom.com/en/press-releases/2021/volkswagen-invests-3-5-billion-euros-in-a-new-research-and-development-center-in-hefei-china
- The new battery factory in Hefei, part of Volkswagen Group's local innovation and production capacity expansion, will supply batteries for Volkswagen Anhui's all-electric models, signifying a significant investment in the new energy vehicles industry in China.
- The automotive giant has allocated more than 140 million euros for the construction of the Hefei battery factory and supporting facilities until 2025, demonstrating a substantial commitment from the finance sector towards advanced technology in transportation.
- As part of Volkswagen Group's electrification strategy, the Hefei plant will produce high-voltage battery systems, with an initial annual capacity of between 150,000 to 180,000 sets, aiming to become the strategic pillar for the production of new energy vehicles in the automotive industry.
