The Volkswagen Group has confirmed an order of $14 billion worth of battery cells from Northvolt’s Swedish gigafactory. In addition to the multi-billion dollar order, the group is also taking a bigger stake in the battery manufacturer.
Founded by two former Tesla executives that worked on Tesla’s Gigafactory 1 in Nevada with Panasonic, Northvolt is a battery startup that has received investments from top companies in its 5 year lifespan years. One of which came from Volkswagen to build a battery factory in Sweden.
With Volkswagen’s new investment came the option of a 50/50 joint-venture with the startup for another battery factory. A venture that will aid in helping the automaker reach its production goals in its new plan to accelerate its electric future.
The two companies announced the “next step” in their joint-venture today: “Northvolt and Volkswagen Group today unveiled the next step in the partnership between the two companies, which was initiated in 2019. The collaboration will place a greater focus on Northvolt’s gigafactory in Sweden, which will be further expanded to support a combined order worth more than $ 14 billion over the next 10 years as Northvolt is selected by Volkswagen Group as a strategic lead supplier for premium battery cells in Europe. In total, Northvolt has now secured in excess of $ 27 billion worth of contracts from key customers.”
Co-Founder and CEO of Northvolt, Peter Carlsson said about the announcement: “Volkswagen is a key investor, customer and partner on the journey ahead and we will continue to work hard with the goal of providing them with the greenest battery on the planet as they rapidly expand their fleet of electric vehicles,”
Prior to VW investment, Northvolt had two battery gigafactory projects, Northvolt Zwei and Northvolt Ett. Northvolt Zwei was in partnership with Volkswagen, which Northvolt has now confirmed it will sell its factory shares to VW.
Northvolt will then consolidate its battery production at its Ett project and Volkswagen will own a bigger stake in Northvolt and the Zwei factory.
Chairman of the Board of Management of Volkswagen Group Components, Thomas Schmall said about the venture: “Volkswagen will continue to deepen the collaboration and partnership with Northvolt. They are one of our key battery suppliers as we make the transition to electric mobility – and there is potential to expand this partnership even further.”
Newly owned Northvolt Zwei is currently in the permitting phase and should come online in 2024, while Northvolt Ett production is expected to start in 2021 with an annual output of 40 GWh.