Battery technology Volkswagen surpasses Tesla in battery production

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Dry coating is the magic term in cell production. Tesla has announced the so-called Dry Coating, and Volkswagen is the first manufacturer in the world to implement it in Salzgitter.

Until now, the active materials of an electrode are mixed with additives and liquid solvents to form a wet paste (slurry). This paste is applied (coating) onto aluminum or copper foil and then subjected to drying in ovens up to 60 meters long, with corresponding exhaust systems to remove the solvent. Afterward, the foil is rolled to obtain thinner electrodes. "This process is enormously energy-intensive. With Dry Coating, we eliminate both the drying system and the rollers. This saves space in production, but above all, it reduces manufacturing costs," says Thomas Schmall, Chief Technology Officer of the Volkswagen Group and Chairman of the Supervisory Board of PowerCo, during a conversation at the Volkswagen representation in Berlin. 
The new manufacturing process saves up to 15 percent of space and up to 30 percent of energy requirements. Schmall estimates the cost savings for the standard cell to be up to 50 percent. Volkswagen aims to equip up to 80 percent of its electric models with this cell. Dry application is suitable for lithium iron phosphate (LFP), nickel-manganese-cobalt (NMC), as well as solid-state batteries.

Just like in newspaper printing

The term "dry" can be confusing at first glance. In the future, the active materials will still be mixed into a creamy paste. The comparison to Nutella works, except that the paste is black. It is applied to the foil using rollers, much like printing ink in newspaper printing. The layer of active materials is only as thick as a human hair. The comparison to newspaper printing is apt, as the rollers come from Koenig & Bauer in Würzburg. With 204 years of experience, it is one of the oldest printing machine manufacturers in the world. "We have secured the usage rights of the patents through a cooperation agreement," says Sebastian Wolf, Production Executive of PowerCo. 
Volkswagen spun off its activities around cell production into this company almost a year ago. Wolf does not consider securing the entire production process through patents to be sensible: "To do that, you would have to disclose too much in the application." The competition for cheaper and more efficient battery cells is global. Tesla had already announced Dry Coating in the spring of 2023. Schmall is convinced that Volkswagen is the first manufacturer in the world to use this manufacturing process: "We are very proud to have developed such a core technology for cell production in Germany."

Deployment from 2026

However, dry coating is still in the proof-of-concept stage. The process has proven itself in internal tests. Now, the focus is on further development and industrialization, a process that will take Volkswagen at least two more years. 
The two battery production lines, each with a capacity of 20 GWh, in Salzgitter will still be equipped with drying and rolling facilities. "Dry Coating will be implemented here from 2026," says Sebastian Wolf. This also applies to battery factories in Valencia (Spain) and St. Thomas (Canada). Wolf sees advantages in energy density, lifespan, and improved fast-charging capability of the battery cell with the new manufacturing technology.

Standard cell: Connections on the narrow sides

While Tesla opts for cylindrical cells, Volkswagen uses prismatic cells. "The format is a matter of belief, just like there are Catholics and Protestants," summarizes Schmall. The stacked cell foils are housed in a rectangular box, estimated to be about 35 cm long, 14 cm high, and 3 cm thick. Volkswagen does not disclose the exact dimensions. 
PowerCo CEO Frank Blome is more specific about the reasons for this format decision: "We integrate the cell directly into the battery and skip the modules to reduce weight (Cell to Pack)." The pole connections are located on the narrow outer sides. "This way, we eliminate current collectors and reduce power losses," says Blome. Additionally, the cell can be cooled from the top and bottom, which positively affects charging performance.

Energy cost is crucial

While the materials of a cell account for about 80 percent of the costs, the savings in energy consumption are noticeable at the production site in Germany with its high energy costs. In the current cell production, Volkswagen plans with an energy demand of 500 to 600 gigawatt-hours per year per production line.

"We need to reach seven cents per kilowatt-hour in the factory to remain economically viable," says Schmall. In Spain and Canada, they are around five cents per kilowatt-hour. In Salzgitter, they are trying to achieve this goal through long-term contracts for green energy. Gas is not used as an energy source in production. All of this is aimed at achieving carbon-neutral production or a lower carbon footprint for electric vehicle batteries.

Doubling the share of electric cars in five years

Volkswagen is currently planning six battery factories worldwide with a total capacity of 240 GWh. The Salzgitter location, in close proximity to conventional engine production, is the starting point. The factory serves as a blueprint for the additional locations. With the introduction of dry application, Volkswagen saves four parallel coating and drying lines per production line. This corresponds to more than 7,000 square meters of space. Schmall does not confirm whether this affects the planning for six factories. "We have made our plans until 2028. We will adjust them at the appropriate time," says Schmall. 
By 2030, Volkswagen aims to increase sales to 50 percent electric cars. In the following five years, there should be a doubling to 100 percent. "This is the critical time zone," says Schmall. In the short term, cost reduction in production is more relevant. Halving the cost could bring the affordability of an ID.2 with starting prices from €25,000 (approx. USD 27,000) and an ID.1 from €20,000 (approx. UDS 21,800) within reach.