Volkswagen And Northvolt Form Joint Venture For Battery Production

Volkswagen/Northvolt joint venture is scheduled to produce lithium-ion battery cells in Germany from 2023/2024 at 16 GWh annually.

Northvolt

Mark Kane

By: Mark Kane

Sep 11, 2019 at 8:08am ET

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Volkswagen and Northvolt have created a 50/50 joint venture to build a factory for lithium-ion batteries, as it was initially announced in June.

Volkswagen holds 50% in the JV, but thanks to an additional 20% stake in Northvolt (part of the €900 million investment), German manufacturer seems to be in control of the entire project.

Here are the highlights of the deal:

VW invest a total of around €900 million ($1 billion) in joint battery activities with Northvolt
part for the 50/50 joint venture
part to acquire 20% of Northvolt
initial production capacity planned - 16 GWh annually (could be increased to 24 GWh later)
location: Salzgitter, Lower Saxony, Germany
construction of the production facility is scheduled to start, at the earliest, in 2020
production from late 2023/early 2024

More about Northvolt

Northvolt Raises $1 Billion: Announces JV With Volkswagen

EIB To Lend €350 Million To Northvolt For European Battery Plant

Scania To Purchase Batteries From Northvolt

The 16 GWh of lithium-ion cells that will be produced by the JV is just a small part of Volkswagen Group's needs in Europe - 150 GWh annually in 2025 (plus a similar volume in Asia).

However, the ability to produce cells almost in-house might be important to get a better position in negotiations with battery manufacturers.

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.”

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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.”

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Volkswagen and Northvolt form joint venture for battery production

The goal is to build a factory for lithium-ion batteries in Salzgitter (Lower Saxony)
Start of production is planned for the end of 2023/beginning of 2024
Initial annual output to be 16 GWh

Wolfsburg (Germany), Stockholm (Sweden), September 06, 2019. 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 finalization of the joint venture is the result of an agreement which both parties concluded in June. Part of the approximately 900 million euros invested by Volkswagen is now flowing into the joint venture. Another part goes directly to Northvolt. In return, Volkswagen has received about 20 percent 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 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 decarbonization program 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.

About Northvolt

Northvolt is a European supplier of sustainable, high-quality battery cells and systems. Founded in 2016 to enable the European transition to a decarbonized future, the company has made swift progress on its mission to deliver the world’s greenest lithium-ion battery with a minimal CO2 footprint and the highest ambitions for recycling. Among Northvolt industrial partners and customers are ABB, BMW Group, Scania, Epiroc, Siemens, Vattenfall, Vestas and the Volkswagen Group.

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