Volkswagen Ventures into Energy Storage: First System to Launch in Germany

2025-10-20 | Eric

Recently, Volkswagen Group and its global battery manufacturer subsidiary, PowerCo, announced that their charging and energy brand, Elli, will officially launch its first large-scale stationary energy storage system with a capacity of 20MW/40MWh in December 2025 at PowerCo’s Salzgitter site in Germany.

Founded in 2022 and headquartered in Germany, PowerCo is currently building battery gigafactories in Salzgitter (Germany), Valencia (Spain), and St. Thomas (Canada), with a total planned production capacity of up to 200GWh. The energy storage system uses PowerCo’s standardized lithium iron phosphate battery packs, designed to create a scalable platform for energy trading and future grid services.

Through this project, Elli officially enters a new segment of the energy value chain, evolving from a charging service provider into a flexible energy solutions supplier.

The Salzgitter energy storage project is not an isolated initiative but a central hub in Volkswagen’s battery ecosystem. This ecosystem revolves around the axis of “R&D–Production–Storage–Recycling,” forming a complete industrial value chain.

Upstream, it connects to PowerCo’s three gigafactories—Salzgitter in Germany, Valencia in Spain, and St. Thomas in Canada. The total design capacity of 200GWh ensures a stable battery cell supply for the storage systems, equivalent to meeting the annual demand of 2.5 million electric vehicles or 100 energy storage systems of the same scale.

Midstream, the Elli energy storage platform integrates functions such as energy trading and grid services, transforming “power storage” into “value creation.”

Downstream, it extends to battery reuse and recycling. Volkswagen has developed several core technologies, including physical crushing and sorting as well as hydrometallurgy, which can recover more than 90% of valuable metals such as lithium and cobalt from used batteries. These recovered materials are then reintegrated into cell production, creating a closed-loop resource cycle.

The CEO of Elli stated: “By developing large-scale energy storage systems, Elli is making a decisive contribution to Europe’s energy transition and supply security. The launch of the first PowerCenter in Salzgitter marks a new starting point for Elli’s long-term strategic plan. In the future, more projects will unlock strong growth potential, driving Elli’s transformation into a pan-European integrated energy provider.”

Elli’s energy storage initiative reflects a broader global trend of automakers expanding into the energy sector. Amid the wave of electrification, car manufacturers are evolving from “vehicle producers” to “energy ecosystem participants.” Energy storage serves as the critical bridge linking the automotive and energy industries. Volkswagen’s actions demonstrate that automakers possess unique competitive advantages in the energy market.

• Next: China Tightens Lithium Battery Export Controls: A Strategic Move Reshaping the Global Energy Supply Chain
• Previous: BAK Battery Launches ENDURO S+ Liquid-Cooled Integrated Cabinet for Commercial and Industrial Use, Creating a Safe, Efficient, and Flexible Energy Storage System