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Volkswagen and Northvolt to Erect European Battery Production Facility

Updated: Jul 7, 2020

Written by Kfir Kedem - May 14, 2020

Volkswagen is partnering up with Northvolt to build the Northvolt Zwei factory in Salzgitter, Germany. Northvolt is a sustainability company who focuses on battery development. They are receiving an investment of €450 million from Volkswagen for this project and hope to commence by 2024. Their goal is to be self-sufficient in terms of battery production and their new facility will produce lithium-ion batteries.

Northvolt is on a mission to create Europe’s first complete value chain for batteries in Europe. This will lead to less reliance on Asian countries, and given the current state of lockdown, is probably a smart maneuver. The factory will have a minimal carbon footprint and be as independent as possible.

Volkswagen is partnering with Northvolt as a strategic move to place themselves as a European industry leader with the recent mobility trends that are focusing on electric vehicles. They are however, still maintaining their relationships with their current battery manufacturers, who are now located in Asian countries.

Auto Trendy’s take:

It is an intelligent maneuver by Volkswagen to partner up with a European based battery developer. Being the only European producer with a complete value chain for batteries in Europe, they are likely to reap the benefits of their investment for the long-term future.

One rival they may have is Tesla, as it is reported they will be producing their own batteries in their new Gigafactory in Berlin. Whether the factory will continue producing lithium-ion batteries in the future or switch to other battery technologies, like Mercedes-Benz’ graphene based battery, only time will tell.

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