Volkswagen and Northvolt to build a gigafactory in Germany for lithium-ion batteries

Sep 6, 2019   OEM

Volkswagen AG and Northvolt AB have created a 50/50 joint venture to build a factory for lithium-ion batteries.

Construction of the production facility is scheduled to start in Salzgitter (Lower Saxony) in 2020. Start of production is planned for the end of 2023/beginning of 2024. The initial annual output is to be 16 GWh.

The finalisation of the joint venture is the result of an agreement which both parties concluded in June. Part of the approximately €900 million ($990 million) invested by Volkswagen is now flowing into the joint venture. Another part goes directly to Northvolt. In return, Volkswagen has received about 20% of the shares in the Swedish battery manufacturer and a seat on the Supervisory Board.

Dr. Stefan Sommer, Member of the Volkswagen AG Board of Management responsible for Procurement and member of the Supervisory Board of Northvolt AB, commented: “The battery cell is the key component for electric mobility. Therefore, Volkswagen and Northvolt are together pushing ahead efficient cell production in Europe to accelerate their joint battery activities. With the founding of the joint venture and the planned construction of a battery cell factory in Salzgitter, we are making a decisive contribution to establishing the core battery cell technology in Germany as well.”

Fredrik Hedlund, Chief Executive Officer of the new joint venture and former Chief Strategy Officer of Northvolt, said: “Building a gigafactory in Germany together with Volkswagen allows Northvolt to further increase the production capacity of green battery cells with a minimal CO2 footprint. This will have a significant impact on electrification in Europe.”

As part of the electrification strategy, the Volkswagen Group alone has an annual demand of more than 150 gigawatt hours from 2025 in Europe – and also in Asia at the same level.

The Group is planning to launch almost 70 new electric models in the next ten years. As a result, the projected number of vehicles to be built on the Group’s electric platforms in the next decade will increase to 22 million. Volkswagen is therefore investing more than €30 billion ($33 billion) into the electrification of the fleet by 2023. Expanding e-mobility is an important building block on the road to a CO2-neutral balance.

Volkswagen has signed off a comprehensive decarbonisation programme aimed at achieving a CO2-neutral balance in all areas from fleet to production to administration by 2050. Volkswagen is thus fully committed to the Paris climate targets.

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