CAPTION: Volkswagen breaks ground on first battery plant in Europe. (picture alliance/dpa)
The German Volkswagen Group has broken ground on its first factory for electric car batteries in Europe, with more set to follow.
The leading German carmaker aims to employ up to 20,000 people in Europe in its new battery firm PowerCo, and is also looking into setting up factories in North America, VW said.
PowerCo is expected to generate more than €20 billion ($20.3 billion) in annual sales by 2030, VW said as it officially started construction on the battery plant in Salzgitter in central Germany.
According to the works council, some 5,000 new jobs are expected to be created in the city in Lower Saxony in northwestern Germany, where VW already employs almost 7,000 people in its existing engine plant.
Chancellor Olaf Scholz and Lower Saxony state premier Stephan Weil attended the laying of the first foundation stone.
PowerCo is to manage the majority of Volkswagen's battery business, including the entire value chain from raw material purchasing to production and recycling.
The new plant should begin production of batteries for mass-market vehicles in 2025, as combustion engine production is gradually phased out in the longer term.
The factory in Salzgitter should eventually be able to produce batteries for half a million electric cars annually. The other planned VW battery plants in Europe will have similar targets.
PowerCo has selected the northern Swedish town of Skellefteå and Valencia in Spain as new sites, along with Salzgitter. The remaining locations have yet to be decided.
The German firm is also considering battery plants in North America, and is working with battery manufacturer Gotion in China.
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