Volkswagen to accelerate solid-state battery production through QuantumScape deal

BERLIN (Reuters) – Volkswagen will massively increase production of solid-state batteries developed with U.S. startup QuantumScape, the companies said on Thursday, as the German carmaker seeks to introduce the technology into more vehicles.

Under an agreement announced Thursday, Volkswagen’s PowerCo battery division will receive the license to mass produce battery cells based on QuantumScape technology, subject to technological advances and certain royalty payments, they said.

The deal replaces a previous joint venture between the two companies, Volkswagen said. Volkswagen owns 17 percent of QuantumScape, according to its annual report, a stake currently worth $459 million.

Under the deal, Volkswagen’s battery unit PowerCo can produce up to 40 gigawatt hours (GWh) per year using QuantumScape technology, with an option to expand to 80 GWh, enough to power about 1 million vehicles per year, they said.

Solid-state batteries can hold more energy than current liquid-cell batteries. Automakers and analysts expect them to accelerate the shift to electric vehicles by addressing their often limited range, which remains a major consumer concern.

“QuantumScape’s technology is about 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 Blome, CEO of PowerCo.

The companies will target a product that will be developed on a larger scale for integration into a series of Volkswagen Group vehicles.

The agreement replaces a joint venture between the two companies for the co-manufacturing of batteries founded in 2018.

(Reporting by Christina Amann; Writing by Miranda Murray; Editing by Christoph Steitz and Madeline Chambers)