Northvolt Receives $14 Billion EV Battery Order From Volkswagen

By McKenzie Carpenter Monday, March 15, 2021

The EV market is ramping up as more popular auto manufacturers are investing resources into developing or improving electric vehicles. Northvolt, a Swedish battery company, recently received a $14 billion purchase order, or PO, from Volkswagen for EV batteries.

A Volkswagen sign.

About Northvolt

Northvolt is an EV battery business that develops sustainable lithium-ion batteries to support clean energy and help the environment. The company was founded in 2016 with a mission to create the world’s most sustainable battery by aiding Europe’s transition to renewable energy, launching in 2017 after an initial funding round of $12 million.

The company is in several key industries, including automotive, grid energy, industrial power, and portable and micromobility energy. In addition, the business claims it has plans for establishing a complete ecosystem for EV battery recycling. Northvolt plans on achieving this goal by developing a full-scale battery recycling plant at Northvolt Labs in Västerås, Sweden and another one in Skellefteå, Sweden at Northvolt Ett. Furthermore, the company aims to reach a goal of 50% recycled material in new cells by 2030.

To date, the business has raised $3.3 billion across several funding rounds. Siemens, BMW, Volkswagen, Goldman Sachs, and many others are all investors in the company. In 2019, Northvolt was able to secure $1 billion in funding to enable Europe’s first home-grown gigafactories for lithium-ion batteries.

Today, Northvolt announced that the company received a $14 billion PO from Volkswagen for EV batteries. This large PO from Volkswagen comes a few months after the car company revealed it had plans to purchase 1.5 million EV units by 2025.

$14 Billion Order

The purchase for the business to produce EV batteries is meant to be extended over a 10-year period. The EV battery company was selected as the premium supplier of EV batteries for the car company. Additionally, Northvolt will sell its share of joint-venture Northvolt Zwei to the car company, and Volkswagen will also be increasing its overall share in Northvolt.

Peter Carlsson, a former executive at Tesla and the co-founder and chief executive of the EV battery business, 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.”

The EV battery business is hoping to secure 25% of market share in Europe by 2030 against large competitors like LG Chem and CATL.

Just last week, Northvolt bought American startup company, Cuberg, to gain even more access to technology for EV batteries.

About the Author

Headshot of McKenzie Carpenter

McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.

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