Volkswagen increases stake in battery partner Northvolt and places $14bn order for cells

by John Shepherd
Thomas Schmall at the Power Day event, where VW also announced an EVs fast-charging network expansion. VW and partners intend to operate about 18,000 public fast-charging points in Europe by 2025. This represents a five-fold expansion of the fast-charging network compared to today and corresponds to about one third of the total demand predicted on the continent for 2025. Photo: VW
Volkswagen is increasing its stake in Swedish battery developer Northvolt – and has placed a $14bn (£10bn) order for the start-up to be its "strategic lead supplier for premium battery cells” in Europe over the next decade.

The deal will give VW a stake of around 20% in its batteries partner, although a VW spokesperson told World Battery News today the exact level of investment had yet to be finalised.

VW will now focus future production of its premium battery cells at the Northvolt Ett gigafactory being developed in Skellefteå, Sweden, the spokesperson said.

'Unified cell' plans

In a related move, Northvolt will sell its share in the ‘Northvolt Zwei’ gigafactory 50-50 joint venture with VW at Salzgitter, Germany, to the car firm.

VW will consolidate production of its new ‘unified cell’ at Salzgitter, which will target increased range and performance for the high-volume segment from 2025.

The product is set to be launched as of 2023 and will be installed across brands in up to 80% of all electric vehicles in the group in 2030. Production capacity at the facility is expected to be up to 40 GWh each year.

'Driving down cost'

Thomas Schmall, VW’s board of management member for technology and CEO of VW Group Components, told VW’s first ‘Power Day’ event yesterday: "On average, we will drive down the cost of battery systems to significantly below €100 (£86) per kilowatt hour.”

Battery cells production at Northvolt Ett will start in 2023 and will "be expanded gradually to an annual capacity of up to 40 GWh”, Schmall said.

Consolidating cell production at Northvolt Ett will "achieve further economies of scale, thereby securing the best possible cost and enabling the lowest environmental footprint in the world for cell production”.

Schmall said VW wants a total of six factories up and running in Europe by 2030, together with partners, eventually producing cells with a total energy value of 240 GWh per year.

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