BERLIN (Reuters) – Volkswagen said on Thursday it will significantly ramp up production of solid-state batteries it developed with U.S. startup QuantumScape as the German carmaker aims to fit the technology into more vehicles.
Under an agreement announced Thursday, VW’s PowerCo battery unit will receive a license to mass-produce battery cells based on QuantumScape’s technology, pending technological advances and certain royalty payments, they said.
Volkswagen said the deal replaces a previous joint venture between the two companies. Volkswagen owns 17% of QuantumScape, according to its annual report, a stake currently worth $459 million.
Under the deal, VW’s PowerCo battery unit can manufacture up to 40 gigawatt-hours (GWh) per year using QuantumScape technology, with the option to expand to 80 GWh, enough to power about 1 million vehicles a year, they said.
Solid-state batteries can store more energy than current liquid electrolyte batteries, and automakers and analysts expect them to accelerate the shift to electric vehicles by addressing their often limited range, which remains a major concern for consumers.
“QuantumScape technology is poised to enter a pivotal phase where PowerCo’s specialized expertise, resources and global manufacturing facilities can help facilitate the transition to industrial-scale production,” said Frank Bloom, CEO of PowerCo.
The companies will target a product that will be scaled up for integration into the Volkswagen Group’s vehicle range.
This agreement replaces a joint venture between the two companies to jointly manufacture batteries that was established in 2018.
(Reporting by Christina Amann; Writing by Miranda Murray; Editing by Christoph Steitz and Madeleine Chambers)