A $14 billion deal. Volkswagen has chosen a supplier of batteries for electric vehicles

In mid-March 2021, the Swedish manufacturer of batteries for electric vehicles Northvolt accepted Volkswagen a large order for $14 billion, designed for the next 10 years.

Under the agreement, Volkswagen will increase its stake in Northvolt, which at the end of 2020 was 20%, and will buy from the Swedish company its share in a joint venture for the production of batteries in Germany. It is known that Volkswagen intends to achieve huge production capacities for the production of 1.5 million electric vehicles by 2025.

A $14 billion deal. Volkswagen has chosen a supplier of batteries for electric vehicles

Northvolt startup was founded in 2016 by a group of entrepreneurs led by Peter Carlsson, who previously held one of the leading positions at Tesla, the world's leading electric vehicle manufacturer. Northvolt pursued an ambitious goal - to take the European Union to a leading position in direct competition with the largest Asian battery manufacturers Samsung, LG Chem and CATL.

Earlier, the startup attracted $1 billion in funding from a number of investors led by Goldman Sachs and Volkswagen. The agreement between Northvolt and Volkswagen means that the total volume of Northvolt contracts will reach $27 billion in two years. Other Northvolt partners and customers are ABB, BMW Group, Scania, Siemens, Vattenfall and Vestas.

"Volkswagen is our key investor, client and partner, and we will continue to work hard so that the German automaker can use the most environmentally friendly batteries for its expanding fleet of electric vehicles," said Northvolt co-founder and CEO Peter Karlsson.

The company is expected to be supported by Swedish pension funds AMF and Folksam and IMAS Foundation, associated with Ikea, as well as major financial partners Volkswagen and Goldman Sachs.^[1]

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