Volkswagen makes grid storage play with Elli site launch

On 8 March Volkswagen opened its first large-scale stationary storage facility in Salzgitter, Germany, through its Elli energy subsidiary. The 20 MW site is directly connected to the national grid and will participate in energy trading on the European power exchange Epex Spot, using cells produced by the automaker’s in-house battery unit PowerCo.

The move positions Volkswagen as the latest in a string of Western battery makers pivoting towards energy storage systems due to lower-than-expected demand for electric vehicles (EVs) Originally the automaker had aimed for PowerCo to have sufficient capacity to supply batteries for around three million EVs per year come 2030; it has since sliced some of its targets in half, now expecting the near-term ramp at Salzgitter to come in around 20 GWh. Longer-term capacity targets across its locations in Germany, Spain, and Canada are now explicitly conditional on proven EV demand.

Over in the US, EV demand has actively slid backwards in the wake of changes to US green energy policy—most notably the elimination of federal tax credits for consumer purchases. Perhaps preempting this most players active in the country have pivoted towards ESS, among them SK North America, Samsung SDI and LG Energy Solution. In December 2025, Ford and SK broke up their US battery manufacturing joint venture, BlueOval SK, in an apparent response to unfavourable regulatory conditions.

For those staying the course, energy storage—and by extension energy trading—could offer a lucrative outlet for cell production that would otherwise sit underutilised while waiting for EV demand to reignite. In a statement, Volkswagen Chief Executive Oliver Blume spelled this out: “Energy storage and energy trading represent a new strategic business area with strong growth potential.” 

Energy subsidiary Elli is being positioned by the automaker as a closed-loop battery ecosystem with cell production, ESS and energy trading all consolidated into a single site. Circularity will also play a role: retired EV packs with around 70-80% remaining capacity are candidates for second-life stationary use, with end-of-life recycling feeding recovered materials back into PowerCo production. 

One thing that may help separate Volkswagen from its peers making the ESS pivot is its effort to build out a vertically integrated energy business rather than simply finding new customers for its existing cell output—in other words, what SK is doing. While this offers a natural advantage, it also leaves Volkswagen exposed to bigger fish in the grid-storage segment. Whether the automaker can compete, on either margin or scale, with established pure-play energy storage specialists remains up for debate.