BERLIN, Sept. 6 (Xinhua) -- Volkswagen and Swedish battery manufacturer Northvolt will build a factory for the production of lithium-ion batteries and have set up a 50/50 joint venture for this purpose, the German automobile manufacturer announced on Friday.
The two companies had already agreed on the cooperation in June. Volkswagen was investing around 900 million euros (992.8 million U.S. dollars), some of which will flow into the joint venture and some will go directly to Northvolt, Volkswagen announced.
In return, Volkswagen had received around 20 percent of the shares in the Swedish battery manufacturer and a seat on the supervisory board.
"The battery cell is the key component for electric mobility. Therefore, Volkswagen and Northvolt are together pushing ahead efficient cell production in Europe to accelerate their joint battery activities", Stefan Sommer, Volkswagen board member and member of the supervisory board of Northvolt commented.
Volkswagen announced that construction of the factory in Lower Saxony was scheduled to start in 2020. Production is planned to start around the turn of the year 2023/2024 and the annual output would initially be 16 gigawatt hours.
"Building a gigafactory in Germany together with Volkswagen allows Northvolt to further increase the production capacity of green battery cells with a minimal CO2 footprint. This will have a significant impact on electrification in Europe", Fredrik Hedlund, CEO of the new joint venture and former Chief Strategy Officer of Northvolt, said.
Over the next ten years, the Volkswagen Group is intending to launch almost 70 new electric models on the market and is expecting a total of around 22 million vehicles of the various Group brands.
By 2023, Volkswagen will be investing more than 30 billion euros in electrification in order to achieve the increasingly stringent CO2 targets.