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PowerCo & Umicore’s joint venture opens for business

The Volkswagen battery subsidiary and the Belgian materials technology group have now launched their joint venture, which was first announced about a year ago. It is called Ionway, and is based in Brussels and will initiate the large-scale production of sustainable battery materials. The joint venture will produce precursor (pCAM) and cathode active materials (CAM). Both parent companies aim to expand Ionway’s annual production capacity to 160 GWh per year by the end of the decade, which is equivalent to the demand of about 2.2 million battery electric vehicles. Where the production will be located, however, is still open.

In a statement, Volkswagen refers to Ionway as the first partnership of its kind between a European carmaker and a leading global CAM manufacturer. In addition, “Both parent companies are deeply committed to scaling up the EU footprint in the e-mobility business by establishing regional, sustainable and transparent battery supply chains.”

Both sides see themselves as profiteers: PowerCo will supply PowerCo’s European battery cell factories with the output of the joint venture and thus “cover a large part of PowerCo’s needs in the EU”.In return, Umicore can count on a secure purchase of its cathode material.The latter is considered the most important technical lever for battery performance. “Cathode active materials are the key technological lever for battery performance, they are the single biggest contributor to overall battery cost and define its carbon footprint. They are thus strategically important input materials central to battery value creation, and crucial for a successful powertrain transition towards sustainable e-mobility,”  Volkswagen Group headquarters explained. Against this backdrop, the merger into a powerful partnership should also provide new impetus for high-performance battery technology.

The car company did not comment on the investment volume in its announcement. However, when the joint venture was announced a year ago, there was talk of Ionway investing three billion euros in building up its activities around the development and production of cathodes and other primary materials. With its headquarters in Brussels, the joint venture will be located close to Umicore’s headquarters, which is also in Brussels. PowerCo’s global headquarters is known to be in Salzgitter, next to the company’s German battery factory, for which the foundation stone was laid in July 2022.

Umicore had opened its first own cathode material production facility in Nysa in Poland in 2022 – its cathode material customers also include ACC, the battery joint venture of Stellantis, Total and Mercedes-Benz. As mentioned, PowerCo is currently building the first battery factory in Salzgitter; another plant of the same design will be built in Sagunt near Valencia. In addition, the unit cell is also to be produced at Northvolt in Sweden, and an as yet unspecified location in Eastern Europe is also planned. No further details have yet been given for PowerCo battery factories five and six.

PowerCo CEO Frank Blome commented: “Through Ionway, PowerCo reaches another milestone of our strategy to vertically integrate the battery supply chain. Together with our trusted partner Umicore, we source our own key cell production materials at reasonable prices. Secure access allows PowerCo to supply cost-competitive battery cells to Volkswagen Group for years to come ‒ enabling its brands to offer attractive, affordable EVs to its customers.”

Umicore CEO Mathias Miedreich adds: “Ionway is a start-up with a significant head start, because our partnership is built on solid foundations with Volkswagen’s PowerCo and Umicore, key players in the electric mobility transformation. Ionway will no doubt grow into an industry reference in e-mobility, boosting innovation, creating hundreds of highly skilled jobs, and will make the energy transition happen.”

Thomas Jansseune has been appointed as CEO of the new joint venture, after having previously spent 22 years at Umicore. In his last role, he was responsible for Umicore’s New Business Incubation with projects in venture capital, solid-state batteries, decarbonisation, battery recycling and hydrogen electrolysis. His statement on the official launch reads as follows: “The foundation of Ionway sends a strong signal for the rollout of battery cell technology in Europe. We are convinced: this company will provide some important building blocks with which the European Union can implement its Green Deal goals.”

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