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Northvolt, a battery startup founded by two former Tesla executives, announced a billion-dollar fundraiser for its batteries gigafactory in Sweden, as well as a 50:50 joint venture with Volkswagen on a other gigafactory in Germany.
Funding, led by The Volkswagen Group and Goldman Sachs Merchant Banking divisions, alongside BMW Group, AMF, Folksam Group and IMAS Foundation, will allow Northvolt to establish manufacturing in its Swedish gigafactory:
The European Investment Bank and new lenders are ready to provide debt financing as part of the total funding, creating the initial capacity of production of 16 GWh lithium-ion battery cells at gigafactory, Northvolt Ett, Sweden is turned on. Construction of the buildings will begin in August.
The large-scale production in this gigafactory is expected to begin in 2021 and its capacity should eventually reach 32 GWh, Northvolt said.
In a separate statement, Volkswagen announced the investment of some 900 million euros ($ 1 billion) in battery-related activities with Northvolt. The automaker acquires approximately 20% of Northvolt's shares and plans to create a 50/50 joint venture between the two companies for a 16 GWh gigafactory with a battery located in Lower Saxony, Germany.
The construction of this gigafactory would start no earlier than 2020, with production of battery cells for Volkswagen from the end of 2023 / early 2024, with the possibility of increasing capacity to 24 GWh later.
Stefan Sommer, member of Volkswagen's board of directors, said:
"Volkswagen is laying the groundwork at all levels for the successful implementation of its electrification strategy. With Northvolt, we also found a European partner whose know-how and sustainable development, CO2– Optimized battery cell production processes will enable us to advance cell production here in Germany. The precondition for this is, of course, the creation of the necessary economic framework. "
Last March, Volkswagen partnered with Sweden's Northvolt to create the European Battery Union consortium to advance electric vehicle batteries in Europe, a partnership that is currently expanding. VW will obtain a seat on the Northvolt Board of Directors, subject to approval.
We recently talked about Volkswagen's need to rethink its battery plan, because of Samsung's inability to provide products. As stated by the company in its publication today, VW's annual European requirements for the year 2025 alone exceed 150 GWh and similar needs in Asia. Thanks to Northvolt, Volkswagen now has the path to follow for at least some of those expectations.
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