Millions in Funding for Battery Factory in Germany

12. May 2022 | Market

The Swedish company Northvolt wants to manufacture battery cells for electric cars in Germany from 2025. The federal and state governments are providing 155 million euros in funding.

Northvolt, a Swedish producer of lithium-ion batteries, is planning a factory in Germany. The Ministry of Economics is funding the planned investment with 155.4 million euros. The German state of Schleswig-Holstein, the planned location of the production plant, will contribute 30 percent of the sum.

According to Northvolt, an annual production capacity of 60 gigawatt hours is planned, sufficient to supply about one million electric vehicles with batteries. The factory is scheduled to go into operation in 2025. It will be completely green batteries because the prospective site in Heide is well connected to wind farms in Schleswig-Holstein, Wirtschaftswoche quotes Economics Minister Robert Habeck. There is already sufficient demand for the battery cells from German industry.

More and More Battery and E-car Factories in Germany

Germany is increasingly becoming a hotspot for the European battery and electric car industry. Tesla’s e-car gigafactory opened in Grünheide, Brandenburg, in March, and in Guben, not far from the Polish border, the German-Canadian company Rock Tech is planning a lithium factory for battery production. Battery components will also be produced by chemical company BASF’s cathode factory in Schwarzheide. Earlier this year, Vietnamese car brand Vinfast also announced plans to manufacture electric vehicles in Germany.

The Ministry of Economics plans to invest over 15 billion euros in battery cell plants alone by 2030. Projects in the areas of raw materials, battery materials and components, and recycling are also being promoted.

The expansion of the industry is accompanied by a great need for strategic raw materials. In addition to battery materials such as lithium, cobalt and nickel, these include rare earths such as neodymium and praseodymium, which are used to make permanent magnets for electric motors. In this context, the shortages triggered by the Corona pandemic and, more recently, the Russian war of aggression, are bringing the heavy dependence on imports into the public eye. Russia, for example, is one of the world’s largest producers of nickel as well as aluminum, which is needed for car body construction. The largest producer of cobalt is the Democratic Republic of the Congo, while refining takes place mainly in China. The People’s Republic also dominates the world market for rare earths and rare earth magnets. In order to become more independent, Europe and North America are seeking to diversify their supply chains.

Photo : iStock/ipopba

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