German automaker Volkswagen has deepened its partnership with Swedish battery-maker Northvolt with a gigantic order and increased stake in company, as it teamed up with oil supermajor BP on speeding up the deployment of ultra-fast electric vehicle (EV) charging stations.
Volkswagen has ordered battery cells from Northvolt’s under-construction first gigafactory in Skellefteå, Sweden, for $14bn over the next ten years, making the company one of its strategic lead suppliers for premium battery cells in Europe.
Northvolt also said it will sell its joint venture share in its second battery cell venture in Salzgitter, Germany, to Volkswagen as the automotive manufacturer scales up its battery manufacturing efforts.
"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," said Northvolt chief executive Peter Carlsson.
The mega-order and the increase of VW’s stake in Northvolt came as the carmaker is in a major ‘green’ shakeup that will see thousands of layoffs to free up investments for electric vehicles and other novel technologies with the goal to establish itself as the world’s largest e-car maker. Volkswagen plans to boost the share of electric vehicles as part of its European sales to 60% by 2030.
“Volkswagen will continue to deepen the collaboration and partnership with Northvolt. They are one of our key battery suppliers as we make the transition to electric mobility – and there is potential to expand this partnership even further,” said Thomas Schmall, chairman of the board of management of Volkswagen Group Components.
Schmall during Volkswagen's 'Power Day' said the carmaker as part of a technology road map together with partners such as Northvolt plans to bring six battery cell giga-factories into operation this decade with a combined capacity to produce 240 gigawatt hours per year.
Both Northvolt's Skellefteå plant, and the German factory at Salzgitter that now will be a Volkswagen battery cell unit, will each have a capacity to produce 40GWh of battery cells.
Volkswagen told Recharge that the transaction with Northvolt will increase its stake in the battery maker "slightly," which currently is just under under 20%.
BP ultra-fast charging
Volkswagen and BP today also announced they will work together on extending and accelerating the deployment of ultra-fast electric vehicle (EV) charging facilities at BP retail sites across the UK, Germany and elsewhere in Europe.
The two companies have signed a memorandum of understanding (MoU) with the intention to develop a network of ultrafast chargers at BP retail sites, and at Aral sites in Germany.
The agreement would also make the oil company the Volkswagen Group’s EV charging partner, with the integration of BP’s charging network into VW Group vehicles. The companies see extensive ultra-fast charging networks as essential to speed up the adoption of electric vehicles.
“Enabling the rapid expansion of electric vehicles is core to BP’s plans to grow our convenience and mobility business, and supports our net zero ambition,” said Emma Delaney, BP’s executive vice president.
“Partnering with Volkswagen Group - one of the world’s great automotive companies - we intend to address a key concern for people considering buying an EV: range anxiety.
“By deploying ultra-fast charging, rapidly and at large scale, we can establish a leading position and help accelerate the take-up of EVs."
Ultra-fast charging units, with a power output greater than 150 kilowatt, can charge a vehicle with the appropriate battery technology for a range of around 160km in just over 10 minutes – broadly as fast as refuelling at the pump, BP said.
Volkswagen’s Schmall added: “Ultra-fast charging is the key enabler for e-mobility and therefore a main pillar for Volkswagen´s transformation.
“Together with strong partners like BP we take this important matter into our hands and will build up to 18,000 new chargers in Europe. That is about one third of the estimated ultra-fast charging demand in 2025.”
Volkswagen added that it will cooperate with utilities Iberdrola and Enel to build up a network of fast-charging stations in Spain and Italy.
The battery cell and e-car charging plans are part of a €400bn ($476.9bn) investment plan through 2025 at Volkswagen.
UPDATED to add detail on Volkswagen's stake in Northvolt