VW invests €900 million for 20% stake in Northvolt
13 June 2019
13 June 2019
Volkswagen Group (VW) is investing €900 million in joint battery activities with Swedish battery cell supplier Northvolt AB. In return, VW will acquire about 20% of the shares in Northvolt and will have one seat on the Board of Directors, subject to approval under antitrust legislation.
A 50:50 joint venture to build a 16 GWh battery cell factory in Europe is planned this year. The intention is to build the factory in Salzgitter, in the German state of Lower Saxony, with construction scheduled to start, at the earliest, in 2020. Battery cell production for VW is due to begin late in 2023 or early in 2024.
Dr. Stefan Sommer, Member of the Volkswagen AG Board of Management responsible for Procurement, commented: ′Volkswagen is laying the groundwork at all levels for the successful implementation of its electrification strategy. With Northvolt, we have now also 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. The prerequisite for this is, of course, the creation of the necessary economic framework.’
Under its electrification strategy, VW’s annual capacity requirements from 2025 in Europe alone are in excess of 150 GWh and demand on a similar scale is expected in Asia. VW’s Supervisory Board agreed in May to build a battery cell plant in Germany and it was reported at the time that VW was turning to Northvolt for its battery needs.
Apart from VW, Northvolt’s industrial partners and customers include Scania, ABB, BMW, Siemens, Vattenfall and Vestas.
Northvolt is currently setting up pilot production of battery cells and a battery cell production facility with an initial capacity of 16 GWh in Sweden.
The Swedish start-up recently acquired a €350 million loan from the European Investment Bank (EIB), the lender’s largest direct financing for battery technology, to build the plant in northern Sweden. Furthermore, Siemens has invested €10 million to help build the factory and the project will, in turn, become Siemens’ preferred supplier for batteries when production starts in 2020.
It was also reported in May that Northvolt is in the final stages of raising funds from IKEA, which began adding electric vehicle charging points to all of its German stores last year. It is believed the company has invested up to €5 million in installing these new charging points and is also investing in creating an electrified fleet.