Annual Report 2023

Group Management Report


The “Technology” Board function is divided into four pillars, the so-called tech stacks. These encompass all activities related to the development, manufacture and procurement of battery cells and systems as part of the “Cell and Battery Strategy” tech initiative, all Group-wide topics in the “Charging and Energy Services” tech initiative, the activities of Volkswagen Group Components and the marketing of Volkswagen platforms and components to third parties (Platform Business).

Cross-brand management of technology activities and a value creation strategy coordinated throughout the Group are designed to improve the Group’s future viability and competitiveness. Synergies are to be leveraged across both traditional technologies and future areas to advance the transition to e-mobility.

The Volkswagen Group formalized its objectives for “Battery, Charging & Energy” by 2030 in its technology roadmap. With the battery roadmap, we aim to substantially reduce the complexity and cost of this key technology so as to make electric vehicles attractive and affordable for as many people as possible.


Our battery activities pillar is divided into two areas: the Center of Excellence and PowerCo. The responsibilities of the Center of Excellence include Group-wide product management, procurement and quality assurance for the battery cell and battery system, and closed-loop recycling. PowerCo will be an important cell supplier for the Group in the future.

In 2022, Volkswagen founded PowerCo SE, its own battery company, which will bundle the Group’s global cell production activities. From the new European battery hub in Salzgitter, this company will manage the development of international factory operations, continuous development of cell technology, vertical integration of the value chain and supplies of machinery and equipment to factories. PowerCo’s approach is based on two key concepts with which it aims to set future industry standards: a unified cell enables flexible use of different battery chemicals and is intended to be used in up to 80% of all Group models in future. The second key concept is the standard factory, which aims to enable the rapid rollout of in-house production with standardized buildings, equipment, IT and infrastructure and will thus be quickly and flexibly adaptable to future innovations.

The Group’s first own cell factory based on this model is being built in Salzgitter and is due to open in 2025. The first machinery for cell production was delivered and installed in 2023. Alongside Salzgitter, a second cell factory is being built in Valencia, Spain. In 2023, PowerCo also took the decision to build another cell factory in St. Thomas, Canada. Each factory is to operate on renewable power and be designed for future closed-loop recycling.

Vertical integration of value creation is a major component of the battery strategy. By building up its own cell production, Volkswagen will progressively take charge of further stages of the value chain so that it can exercise greater influence over the availability, cost and sustainability of key raw materials and other items. The supply of raw materials is being safeguarded using a three-part strategy: long-term supply contracts, investment with partners, and procurement on the commodity spot market, backed up by financial hedging.

Cathode materials have a key role to play in the transformation to e-mobility as a driving cost factor and main component in batteries. PowerCo and the Belgian materials technology group Umicore have formed the joint venture IONWAY, which aims to supply cathode and primary materials to the European cell factories starting in 2025. The partners aim to be producing materials for 160 GWh of cell capacity per year by the end of the decade. The planned cathode factory will be built in Nysa/Poland.

Charging and Energy

Since 2021, the Charging and Energy area has played a key role in the Volkswagen Group’s e-mobility strategy with the aim of becoming a leading provider of a smart charging and energy ecosystem.

As part of the strategic alignment, the Group is focusing on two key areas. Firstly, sales of electric vehicles are being underpinned by the development of a global fast-charging infrastructure. In Europe, the Group and its brands are involved in the pan-European joint venture IONITY, the Ewiva joint venture in Italy and other partnerships. By 2025, the number of public fast-charging points in Europe is to increase to 18,000. At the same time, both the North American charging network Electrify America – already one of the largest public charging networks in the USA – is to be expanded to 8,000 fast-charging points and CAMS in China is to be enlarged to 17,000 fast-charging points. Secondly, the Group is opening up new business models involving smart charging and energy solutions. The Group operates as one of the largest vehicle-charging subscription providers in Europe with its charging and energy brand Elli. Its charging network offers access to over 600,000 charging points Europe-wide with approximately 35,000 fast-charging points in 27 countries. In addition, Elli’s product portfolio also includes the full range of charging solutions for private customers and companies, from the Company’s own wall box to the flexible fast-charging station Flexpole and smart charging solutions. As part of a pilot project involving the smart control of stationary batteries, Elli also began trading electricity in 2023. This makes Volkswagen the first automotive group to trade on the EPEX Spot power exchange.

Volkswagen Group Components

The independent corporate entity Volkswagen Group Components, under the umbrella of Volkswagen AG, forms the third pillar of the “Technology” Board function. Some 70,000 staff with expertise in developing and manufacturing vehicle components work worldwide in more than 60 plants at 45 sites.

The product portfolio is focused on technical components such as chassis, axle systems, steering, transmission, electric drives, thermal management systems in the electric drivetrain and battery systems.

With its entry into e-mobility, Volkswagen Group Components were able to work systematically on optimizing the electric drivetrain thanks to close cooperation between product management and development. In 2023, it debuted the new, highly efficient APP550 electric drive, which features both higher performance and improved efficiency. The new powertrain was developed by Volkswagen Group Components together with Technical Development at Volkswagen Passenger Cars and is being used for the first time in the Volkswagen ID.7. It is produced at Volkswagen’s site in Kassel.

Platform Business

The fourth pillar of the “Technology” Board function is Platform Business (third-party business), which pools Group-wide responsibility for the sale of platforms and components to external companies. This organizational unit is responsible for the successful initiation, acquisition (including contract design) and support of customer projects including the related order processing (logistics, billing). In the cooperation project with Ford, the necessary cross-brand structures and processes have been created within the Volkswagen organization so that other external customers can also be efficiently served in the future. Ford plans to produce approximately 1.2 million MEB-based vehicles for the European market by the end of the decade. In 2023, the automaker presented the Ford Explorer, the first model based on the MEB. Volkswagen is also continuing to explore a supply agreement with Indian automaker Mahindra for MEB components such as electric motors and battery cells.

Modular Electric Drive Toolkit (MEB)
The modular system is for the manufacturing of electric vehicles. The MEB establishes parameters for axles, drive systems, high-voltage batteries, wheelbases and weight ratios to ensure a vehicle optimally fulfills the requirements of e-mobility. The production of the first vehicles based on the MEB started into series production in 2020.
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