Volkswagen-Umicore Joint Venture Selects Poland for First Car Battery Parts Plant

A Volkswagen vehicle sits parked during a news conference announcing the construction of a gigafactory for electric vehicle battery production by Volkswagen Group’s battery company, PowerCo SE, in St. Thomas, Ontario, Canada on April 21, 2023.

BERLIN, Oct 8 – PowerCo, the auto battery parts joint venture between Volkswagen (VOWG_p.DE) and Belgian materials firm Umicore (UMI.BR), has confirmed Poland as the location for its inaugural factory, as stated on Saturday.

The $2.9 billion joint venture, named Ionway and initially mentioned in December 2021, aligns with the trend of European automakers localizing battery supplies in response to the growing demand for electric vehicles.

The Polish government is offering 350 million euros ($371 million) in cash grants to support the investment in the southwestern town of Nysa, which is expected to generate approximately 900 jobs.

Ionway aims to ramp up its annual production capacity to approximately 160 gigawatt hours (GWh) per year by the end of the decade, sufficient to power 2.2 million electric vehicles.

PowerCo, following Volkswagen’s announcement in April outlining plans to invest up to C$7 billion in a car battery plant in Ontario, Canada, cited strategic location, a skilled labor pool, and ample renewable energy sources for production as the reasons for selecting Poland.

Construction will commence once the permitting process is finalized.

Ionway is designed to supply PowerCo’s European battery cell factories with critical battery materials, covering a significant portion of PowerCo’s requirements within the European Union. In return, Umicore gains secure access to a crucial segment of Europe’s demand for cathode materials for electric vehicles.

(Note: Updated the wording for clarity and accuracy. Fixed grammar and phrasing issues.)