Volkswagen’s battery subsidiary PowerCo has announced plans to build only one of two originally planned production lines at its Salzgitter plant in Germany. The decision comes as the automotive sector adjusts to a slowdown in demand for electric vehicles.
The company’s works council said PowerCo will build a single 20 GWh production line at the Salzgitter plant. While there is room for a second line, its construction has been put on hold. This development has raised concerns among workers about potential job losses and is seen as part of a broader cost-cutting initiative at Volkswagen.
The announcement follows Volkswagen’s recent statement threatening plant closures and the elimination of job guarantees for its namesake brand. The company cited the need to “turn things around” within the next 1-2 years.
Despite the scaled-back plans, a PowerCo spokesperson confirmed that production at Salzgitter is still scheduled to begin in 2025 as originally planned. The company said that further expansion of production capacity will be flexible and in line with market demand.
PowerCo’s three announced plants in Salzgitter, Valencia, Spain, and Ontario, Canada, have a combined planned capacity of up to 170 gigawatt-hours. However, the company’s Chief Technology Officer, Thomas Schmall, recently indicated that while the Spanish and Canadian plants could potentially be expanded, the realization of these plans remains uncertain.
This development reflects the broader challenges facing the electric vehicle market and highlights the need for automakers to adapt their strategies in response to changing market conditions.
Source: Reuters
