Volkswagen pledges further €500 million to Swedish battery partner

Volkswagen has invested a further €500 million in sustainable battery activities with its Swedish battery partner Northvolt AB.

The Group has participated in a financing round with a total of US$2.75 billion and continues to hold about 20% of the shares in the Swedish cell producer

The funds are to be used for capacity expansion in the fields of production, recycling and research and development. Among other activities, Northvolt intends to expand the capacity of its Northvolt Ett gigafactory in Skellefteå, Northern Sweden from 40 GWh to 60 GWh per year, in order to meet higher demand from customers.

Volkswagen had already invested about €900 million in Northvolt in June 2019, acquiring around 20% of the shares in the company as well as a seat on the Board of Directors. The production of Volkswagen premium cells is to be concentrated at Skellefteå in cooperation with Northvolt. Production of these cells is due to start in 2023 and the annual capacity intended for Volkswagen is to be built up step-by-step to as much as 40 GWh.

The second Volkswagen gigafactory is located in Salzgitter and will produce the standard cell for the volume segment from 2025. It is also expected to reach an annual production volume of up to 40 GWh. Both gigafactories are to be operated using electric power from renewable energy sources.

All in all, Volkswagen expects to commission six cell factories in Europe by 2030 together with its partners with a view to safeguarding the ramp-up of electric vehicle production. After Skellefteå and Salzgitter, possible locations and partners for the next cell factories are already being considered.

Thomas Schmall, group board member for technology and CEO of Volkswagen Group Components said: “Batteries are one of the key success factors in our unprecedented electric offensive. In the major area of green battery cells, we are assuming a pioneering role in Germany and Europe together.”