Volkswagen is to contribute US$620m to its Swedish battery partner, Northvolt AB, as part of a total US$2.75bn funding round. Following the investment, Volkswagen will maintain around a 20% stake in the battery company, and the funds are to be used to expand production, recycling and R&D activities. Northvolt also intends to expand capacity of its Northvolt Ett gigafactory in Skellefteå, northern Sweden, from 40GWh to 60GWh annually, to meet high customer demand.
“With this investment, we are strengthening our strategic partnership with Northvolt as a supplier of sustainable battery cells which are produced using renewable energy and are comprehensively recyclable,” commented Arno Antlitz, VW group board member for finance and IT.
In June 2019, Volkswagen invested €900m (US$1.1m) in Northvolt to acquire a 20% share in the company, alongside a seat on the board of directors. Production of Volkswagen’s premium cells is due to start at the Skellefteå facility in cooperation with Northvolt by 2023, and the company estimates that annual capacity will be built up to reach around 40GWh.
“Batteries are one of the key success factors in our unprecedented electric offensive,” said Thomas Schmall, group board member for technology and CEO of Volkswagen Group Components. “In the major area of green battery cells, we are assuming a pioneering role in Germany and Europe together.”
With a second gigafactory in Salzgitter, Volkswagen will produce standard cells for the volume segment beginning in 2025, The site is also expected to reach an annual production volume of around 40GWh. Both production facilities will be operated using electric power sourced from renewable energy sources.
Volkswagen expects that it will commission six cell factories in Europe by 2030 alongside its partners with a view to safeguarding and increasing the company’s electric vehicle production.