Northvolt breaks ground for German battery factory

Northvolt has begun construction of its battery cell factory in Germany. The official starting signal for the construction work at the gates of the town of Heide in the Schleswig-Holstein district of Dithmarschen was given in the presence of Federal Chancellor Olaf Scholz and Vice-Chancellor Robert Habeck.

Image: Northvolt

In addition to the two top politicians from Berlin, the state of Schleswig-Holstein’s Minister-President Daniel Günther also attended the ceremony in Heide together with Northvolt CEO and founder Peter Carlsson and Northvolt’s Head of Germany Christofer Haux.

Before the symbolic construction button was pressed instead of the ground-breaking ceremony, Carlsson himself and members of the project team informed the Chancellor and the Minister-President about the construction project – although Daniel Günther, at least, was probably already well aware of the situation before this briefing. According to Northvolt, the factory is one of the largest industrial projects in Germany.

Despite the announcement back in March 2022, it was not a foregone conclusion that the ground-breaking event would take place at all. Although the company had quickly received the necessary IPCEI funding approval, rumours were still doing the rounds in autumn 2022 that the high energy prices following the conflict in Ukraine could delay the construction of the factory. And later, the lavish subsidies from North America lured Northvolt to announce a battery factory in Canada in the meantime. After a decision was made in Berlin in December 2023 to pay the Northvolt subsidy despite the budget freeze at the time, Northvolt finally committed to building the battery factory in Heide in January 2024 – and has now got started.

The Swedish company reiterates its original justification for the location decision, namely the oversupply of locally produced, CO2-neutral wind energy. “With the help of this renewable energy, Northvolt wants to produce the most environmentally friendly battery cells in the world – ‘made in Schleswig-Holstein’ – and supply the automotive industry,” the company writes. Once completed in 2029, the battery cell factory will employ around 3,000 people and produce battery cells in the order of 60 GWh per year. At 60 kWh per car, that would be enough for around one million e-cars per year. In addition to sourcing wind energy, Northvolt also wants to save fresh water and use grey water from the local wastewater association to cool the factory. There are also plans to provide waste heat for the development of a local district heating network in Heide.

The first battery cells are to be built in Heide in 2026 as part of the €4.5 billion investment, for which Northvolt is receiving partial support from Germany as part of the Battery IPCEI (around €564 million from the federal government and around €136 million from the state of Schleswig-Holstein). “It’s great that things are starting now. We are very grateful that customers, investors and the local people are supporting us so strongly in the realisation of this flagship project of the global energy transition,” says Northvolt CEO Carlsson. “Heide already feels like home to us. If you’re looking for a purpose instead of a job in the state with the highest quality of life, you’ve come to the right place.”

“Investments like Northvolt’s are of strategic importance for our country and for Europe. Germany was, is and will remain a strong industrialised country. And the production of good cars will remain the backbone of our industry beyond the combustion engine,” Chancellor Scholz is quoted as saying in the company’s press release. “For this we need battery cells made in Germany, made in Europe. It is therefore good news for our entire country that climate-friendly battery cells for one million cars a year will be produced here in the north in the future.”

Vice-Chancellor and Federal Minister of Economics (and former Minister of Economics for the state of Schleswig-Holstein), Robert Habeck, added: “Today is a good day for the west coast and for Germany as an industrial centre. The start of construction in Heide shows that the transformation towards climate neutrality and growth go hand in hand if the will is there and the framework conditions are right. The Northvolt project is a beacon example of how we can positively shape the environmentally and climate-friendly transformation of our value chains.”

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