Yahoo Finance Volkswagen signs $14bn battery deal with Sweden's Northvolt
Battery supplier Northvolt and Volkswagen Group (VWAGY) have signed a $14bn (£10bn) supply deal for premium batteries for cars in Europe.
The evolving partnership between the companies, which began in 2019, will mean the expansion of Northvolt's gigafactory in Sweden. The growth will support a combined order worth more than $14bn over the next 10 years, the companies said.
"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," said Peter Carlsson, co-founder and CEO, Northvolt.
The company said that by consolidating cell production to the Northvolt Ett gigafactory, the partners will "achieve further economies of scale, thereby securing the best possible cost and enabling the lowest environmental footprint in the world for cell production."
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As Volkswagen plans to scale up its own battery manufacturing in Europe, Northvolt will sell its share in the joint venture Northvolt Zwei in Salzgitter to Volkswagen. Volkswagen will at the same time increase its ownership in Northvolt.
“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,” said Thomas Schmall, chairman of the board of management of Volkswagen Group Components.
The deal is the latest in a range of moves in the car market looking to a net-zero carbon future. Tesla (TSLA) has also made significant moves towards establishing a gigafactory in Germany to supply its own range.
Tesla says its first electric vehicles from its factory in Germany will roll off production lines from July 2021.
Musk also said in September that Tesla was developing a radically cheaper new electric car battery, but it would not be ready for about three years.
