Volkswagen is investing 900 million euros in the Swedish battery manufacturer Northvolt. Part of the sum is earmarked for a planned joint venture with the Swedish battery manufacturer, another part goes directly to Northvolt.
In the course of the year, an equal-involvement joint venture is to be established. The aim is to set up its own battery cell production with Northvolt technology at the VW Salzgitter site. Provided that the framework conditions are met, the plant is to be built from 2020 in order to start battery cell production at the turn of the year 2023/2024. Production is to be 16 GWh in the first year and expanded to 24 GWh in the following years.
Subject to an antitrust review, the Wolfsburg company will also receive a seat on the Northvolt Supervisory Board for its 20 per cent stake. It is still unclear how much Volkswagen has paid for the shares and what amount will flow into the joint venture.
The Group is satisfied with their new European partner. “With Northvolt, we have found a European partner whose know-how and sustainable, CO2 optimized battery cell production processes will enable us to advance cell production here in Germany,” says Stefan Sommer, Member of the VW Board of Management responsible for Procurement. “The prerequisite for this is, of course, the creation of the political framework“.
With the planned capacity, however, Volkswagen will only be able to serve a small part of their own electric car production’s demand. If the Group follows its current electrification strategy, it will have an annual demand of over 150 GWh in Europe by 2025. Similarly large quantities of battery cells will likely also be needed in Asia. The purchase of cells from Asia will therefore inevitably continue on a large scale.
There had recently been speculation about closer cooperation between Volkswagen and Northvolt. In May, it was reported that Volkswagen would expand its cooperation with Northvolt in the field of battery research, which it had concluded in March, in order to set up a joint production facility. Salzgitter was then discussed as a potential for VW’s cell production.
In addition to Volkswagen, other companies have also invested in the Swedish company: Northvolt completed a $1 billion capital roundup for the construction of its planned cell factory in Skellefteå, Sweden. The fresh capital comes from Volkswagen, Goldman Sachs, BMW, AMF, the Folksam Group and the IMAS Foundation.
Northvolt plans to set up its own production facility in Sweden independently of Salzgitter. Construction work on the cell factory, which will initially have an annual production capacity of 16 GWh and will later be expanded to at least 32 GWh, is scheduled to begin in August. Northvolt’s industrial partners and customers include Volkswagen AG, Scania, ABB, BMW, Siemens, Vattenfall and Vestas.