The joint venture is just a small part of the overall business plan, but it might be an important bridgehead for the future.

Volkswagen announced that the battery joint venture with Northvolt is moving forward to start the production of lithium-ion cells in Salzgitter in early 2024.

The initial investment is about €450 million, while the initial production target is 16 GWh annually, which is just a tenth of the envisioned VW Group demand in Europe from 2025. The rest of the battery supply (over 150 GWh in Europe, similar level in Asia, and additional undisclosed demand for North America) will be fulfilled by external suppliers:

  • Europe (over 150 GWh from 2025): LG Chem, Samsung SDI, SK Innovation and CATL
  • China (probably also over 150 GWh from 2025): CATL
  • North America: SK Innovation

The joint venture’s “Northvolt Zwei” factory will be located in Salzgitter, Germany, at one of Volkswagen's sites.

According to the latest news, Volkswagen will erect the buildings and infrastructure for the JV and then rent the factory space.

"The joint venture between Volkswagen Group and the Swedish battery producer Northvolt AB is gaining further momentum. It has been decided that Volkswagen itself will erect the buildings and infrastructure for the joint venture’s “Northvolt Zwei” factory that is to produce lithium-ion battery cells, in order to leverage synergies at the Salzgitter site – based on the existing Center of Excellence for Battery Cells. Some €450 million is to be invested in this project. The joint venture will then rent the factory space."

Highlights of the JV:

  • 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
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Volkswagen invests in battery operations at Salzgitter

The joint venture between Volkswagen Group and the Swedish battery producer Northvolt AB is gaining further momentum. It has been decided that Volkswagen itself will erect the buildings and infrastructure for the joint venture’s “Northvolt Zwei” factory that is to produce lithium-ion battery cells, in order to leverage synergies at the Salzgitter site – based on the existing Center of Excellence for Battery Cells. Some €450 million is to be invested in this project. The joint venture will then rent the factory space. Battery cell production at the plant is scheduled to commence in early 2024 with an initial production capacity of 16 gigawatt hours.