PowerCo making battery cells at Salzgitter for Cell-to-Pack assembly at Martorell
The PowerCo division of Volkswagen Group has begun battery cell production at its Salzgitter gigafactory in Germany. The cells are being supplied to a new battery system assembly facility at the SEAT Martorell plant in Spain.
The beginning of cell production in Salzgitter means VW Group is now designing, developing and producing its own battery cells entirely in Europe.
The batteries are being delivered to VW Group brands for final testing and will debut this year in what VW Group describes as “the electric urban car family” produced by VW, Skoda and SEAT/Cupra. Models include the VW ID Polo and ID Cross SUV, as well as the Skoda Epiq SUV and Cupra Raval, all of which are built on the MEB+ modular electric drive platform.
Production of the PowerCo’s proprietary Unified Cells at Salzgitter will be gradually increased through 2026 to annual production of 20 GWh, equal to approximately 250,000 EVs, but with scope to expand to 40 GWh according to demand. PowerCo is expected to cover around 50% of the demand for Unified Cells in the VW Group, with the other half provided by external suppliers. The company said that Salzgitter will lead the way for other PowerCo gigafactories in Valencia, Spain and St Thomas, Canada. Based on the experience gained in production at Salzgitter, intelligence will be transferred to the other two gigafactories.
Sharing risk and investment
In terms of battery assembly in Spain, production at Martorell will be supported this year by production at the Mobis plant in Pamplona – Mobis Spain Electrified Powertrain. Mobis (part of Hyundai Group) is supplying battery packs for SEAT and Cupra production at Martorell based on a ‘make and buy’ strategy at VW Group.
“Normally you either produce the component yourself or you buy it (‘make or buy’) but with regard to battery cells and systems we are making our own battery cells and also purchasing the same battery cells from certain technology partners,” said a spokesperson for VW Group. “The Mobis production in Pamplona is like a blueprint of the Martorell battery assembly plant, producing exactly the same battery systems on a ‘build-to-print’ principle.”
That means Mobis is contract manufacturing the battery system based strictly on specifications provided by VW Group. The strategy means VW Group is sharing investment and dividing risk, making the battery system inhouse at Martorell, as well as buying the same system from Mobis in Pamplona.
Universal cell architecture
VW Group said the standardised prismatic cell architecture behind the Unified Cells is suitable for application across all brands and regions, providing economies of scale, cost saving and flexible application to battery type, from lithium iron phosphate (LFP) to nickel-manganese-cobalt (NMC) and solid state. Production at the 6.9-hectare Salzgitter gigafactory has started with cells based on NMC technology, which VW Group said delivers around 10% more energy density compared to previous cells. However, thanks to VW Group’s Cell-to-Pack system, all cell chemistries can be accommodated in the finished battery pack, which differs from existing battery modular builds. Cell-to-Pack is agnostic with regard to cell technology, including for sodium-ion cells, which PowerCo is also now looking at closely.
“You don’t have to worry about the chemistry which is inside because it is one size fits all,” said VW Group’s spokesperson. “You can put all the available and market-going set chemistries into the same format. The battery system is totally agnostic regarding the cell chemistry. It doesn’t matter if the Unified Cell contains NMC or LFP, it will always fit into Cell-to-Pack.”
The system offers advantages in range, efficiency and performance, enabling direct integration of battery cells without modules. “This helps to reduce cost and complexity, while increasing efficiency and volumetric density of battery packs,” said a spokesperson for PowerCo.
In the Cell-to-Pack system, cells are stacked directly into the battery casing, optimising space and getting more energy density into the same space. It is also less complex thanks in part to gigacasting the battery case as one product, which eliminates 100 different parts. “In general, due to optimisations in all circumstances – cost, performance, charging time, range – it is nice technological advance,” said VW Group’s spokesperson. “The battery is eye-level with the competition. It is a new chapter in our battery technology and battery strategy.”
Automation and transparency
VW Group said the PowerCo facility in Martorell is using highly automated production, combined with real-time data analysis to continually improve process stability, efficiency and quality.
“A manufacturing execution system (MES) is employed to orchestrate the line operation, ensure traceability and to exchange information with the enterprise resource planning (ERP) system,” said VW Group’s spokesperson. “Specific machine/operator use cases are designed and implemented in the machine controls and MES solution. Real-time data can be visualised with dashboards on the shopfloor to provide relevant information to experts for decision making.”
PowerCo is also monitoring and gathering data from equipment and infrastructure at Salzgitter for better transparency and as a basis for AI-supported quality control.
The Salzgitter gigafactory is also using automation for production logistics. As with the production of combustion engines, automated guided vehicles (AGVs) are moving inbound (external) parts, as well as intermediate products on coils, rejects and empties around the production area. Transport orders are controlled automatically via integrated IT systems, according to PowerCo.
Finished cells are also stored and retrieved from high bay warehouses using an automated storage and retrieval system (AS/RS). According to PowerCo’s spokesperson, logistics are currently in the ramp-up phase and will be in full operation in the course of 2026.
The finished cells are made available to customers within the VW Group in standardised reusable containers. Those are currently shipped by truck but could be carried out by rail in the future.
Sustainable power
VW Group said energy-intensive production at the Salzgitter gigafactory is running on renewable energy derived from wind and solar. That includes, as a first for the company, green electricity for the clean and drying rooms.
VW Group said that in total, the Salzgitter gigafactory will emit 115,000 tons less CO2 annually than comparable gigafactories. PowerCo signed long-term agreements with green energy providers Alterric and EnviTec BioGas in 2024 for the provision of 3 terawatt hours of renewable electricity over ten years. Alterric will contribute 240 gigawatt hours annually from wind power, while EnviTec Biogas AG will provide 65 gigawatt hours per year from solar energy.
Work on the Salzgitter gigafactory began in 2022 and VW Group has invested around €2 billion ($2.34 billion) to change the previous engine plant on the site to a state-of-the-art battery cell facility.
“The PowerCo gigafactory in Salzgitter sends a strong technological signal for Europe and serves as a cornerstone on our path to becoming a global automotive tech leader,” said Oliver Blume, CEO of VW Group. “We are the first European carmaker to establish our own battery cell development and production. This step strengthens our position and independence in the global competition."
Sebastian Wolf, chief operating officer at PowerCo, is overseeing cell production at Salzgitter and will be in charge of production in Valencia and St Thomas when those facilities come into operation.
