Northvolt sticks with Germany over the US for its new gigafactory

Northvolt is going forward with building its EV battery plant in Germany after the EU ups its subsidies game to compete with US incentives.

In November 2022, Northvolt paused its plan to build Northvolt Drei, a gigafactory in Heide, Germany, due to rising energy costs in Europe caused by Russia’s invasion of Ukraine.

Jesper Wigardt, a Northvolt spokesman, said in November (via Automotive News Europe):

Given what is happening in North America and what is happening in Europe on the other hand, with energy prices not the least, we are during next year going to decide what to prioritize.

Wigardt said at the time that a US decision would have delayed the German plant “a bit.” However, it’s now all systems go for Northvolt’s gigafactory in Heide, as long as EU subsidies are approved. The Heide gigafactory will be located near an abundance of wind power.

Automotive News Europe reported today that “Northvolt could invest around 3-5 billion euros ($8.8 billion) in the plant and receive [more than] half a billion euros in German subsidies”:

The subsidies for Northvolt’s battery plant, if approved, would be the first granted by Germany under the European Union’s Temporary Crisis and Transition Framework, developed to support green industrial projects as Europe scrambled to provide a competitive offer to US subsidies provided by the Inflation Reduction Act.

Europe now has to compete with the Biden administration’s Inflation Reduction Act incentives that are wooing a lot of companies to launch factories in the US. European automakers want to make batteries domestically in order to reduce dependency on manufacturing abroad, even though they still have to rely on raw battery materials from Asia. There are also a number of Asian companies planning to build battery factories in Europe.

Production is expected to start in 2026, and Northvolt Drei will have up to 60 gigawatt hours of capacity. That’s enough to supply around 1 million EVs with battery cells annually.

Read more: Scania and Northvolt’s new EV battery can power a truck for 1.5M km

Photo: Northvolt

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