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Volkswagen has indicated plans to build 22 million electric vehicles across all of its platforms over the next decade.

VW Developing Joint-Venture Plan to Produce EV Batteries

Automaker coordinating €1-billion capital investment with Northvolt to manufacture lithium-ion power units for electric vehicles

Volkswagen AG is coordinating a €1-billion capital investment in EV battery cell production in Germany. The plant would be a joint venture with a Swedish start-up company called Northvolt.

Specific goals and commitments are vague, but the concept supports VW’s broader strategy to expand its battery-powered electric vehicle output. VW has indicated its planned BEV production would require over 300 GW of power supplies by 2025.

According to German business media, the joint venture is currently known as the European Battery Union and would start production by early 2020.

Northvolt was established by two former Tesla executives in 2016 to industrialize production of lithium-ion batteries for electric vehicles. It is headquartered in Stockholm, with manufacturing centers planned in Sweden and Poland, though it is still raising the capital for those operations.

VW has been involved in battery research with Northvolt and it’s that effort that is being discussed for expansion. It’s also reported that VW may acquire a minority stake in Northvolt, with manufacturing to follow as a joint venture.

Volkswagen has indicated its willingness to invest €1 billion ($1.12 billion) through the joint venture to build the battery cell production plant in Salzgitter, Germany, depending on economic incentives, including subsidized electricity, according to press reports.

All this is in context of VW’s ambitious plans to build 22 million electric vehicles across all of its platforms over the next decade. It’s in that context that the automaker would require an expanded number of EV battery cells, though the joint-venture would meet only a portion of VW’s total battery cell requirements.

Also, Northvolt would not be an exclusive supplier of batteries to the automaker. It has previously committed to supply about half of its projected output to other manufacturers, including Siemens AG, ABB, and BMW.

 

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