Swedish lithium electronics manufacturer Northvolt wins $14 billion battery order from Volkswagen

According to foreign media reports, Swedish lithium-ion battery manufacturer Northvolt said that it has won a 10-year order worth more than $14 billion from Germany's Volkswagen. Northvolt also said it would sell its stake in its Salzkite joint venture, Northvolt Zwei, to Volkswagen, which will become the sole owner of the German super factory.

"by integrating battery production into the Northvolt Ett superplant, partners will achieve further economies of scale to ensure optimal costs and reduce the adverse environmental impact of battery production," Northvolt said in a statement.

Volkswagen formed a partnership with Northvolt in 2019 after Volkswagen said it owned about 20 per cent of the Swedish company. Northvolt plans to play a key role in Europe, competing with Asian battery companies such as Ningde Times and LG Chemical, with the goal of gaining a 25 per cent market share in Europe by 2030. The company said it had won contracts worth more than $27 billion from major customers.

Just last week, Northvolt announced the acquisition of Cuberg, an American start-up, to gain technology to improve the range of electric cars. Northvolt was founded in 2016 by Peter Carlsson, a former Tesla executive. Since its inception, the company has raised more than $3.6 billion. Its last round of fundraising was $600m, with investors including Volkswagen, Baillie Gifford and Goldman Sachs.

As more and more automakers begin to switch to electrification, battery makers around the world are struggling to keep up with demand. Investors are also scrambling to bet on the electric car industry, further pushing up the valuations of electric car companies such as Tesla and Lucid Motors. Volkswagen plans to have six battery factories in Europe by 2030 to ensure the supply of batteries for its electric vehicles, Volkswagen said on Battery Day on March 15. Volkswagen is currently switching to battery-powered cars.