The new Salzgitter battery cell plant is expected to reach an annual capacity of 40 GWh - enough for about 500,000 electric vehicles.
The Volkswagen Group has signed a Memorandum of Understanding with Salzgitter AG to be one of its first customers of a new low-emissions steel.
The collaboration will expedite battery cell production at Volkswagen's Salzgitter plant and create its 'unified cell' strategy.
The Volkswagen Group aims to achieve a closed-loop process of recovering precious raw materials from lithium-ion batteries, and also help protect the climate.
Volkswagen is building up battery cell development and production know-how with a pilot line at the Volkswagen Group Center of Excellence in Salzgitter.