VW-owned Scania to invest €10m in Northvolt’s battery cell manufacturing fab

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Scania, the truck manufacturer that is owned by Germany’s Volkswagen, has pledged investment of €10 million into the €4 billion battery cell production plant that will be built by Northvolt in Northern Sweden.

Northvolt has confirmed that Scania will fund a demonstration production line and research facility in the city of Skelleftea in northern Sweden. The purpose of the facility will be to commercialize battery cell technology for heavy commercial vehicles in Europe.

Automobile companies are driving investment and R&D in Europe’s nascent battery production industry as the continent seeks to play catch-up to its Asian competitors. BMW, Daimler, Volvo and VW are all involved in some way in the ramp-up of EV production in Europe, with the development of purpose-built car batteries high on the agenda.

Northvolt’s CEO is former Tesla employee Peter Carlsson, who is intent on making the company Sweden’s answer to the Musk-founded U.S. EV leader. The battery plant at Skelleftea is viewed as a European rival to Tesla’s own Gigafactory in the Nevada desert.

Northvolt, which is partnering with ABB on the financing and development of the battery production site, aims to produce total battery storage capacity of 32 GWh by 2023.

The company is not alone in its endeavors to plug Europe’s cell production gap: Germany’s TerraE – a consortium of leading industrial players and higher education establishments – has plans to develop and build 34 GWh of lithium-ion cell facilities across Europe by 2028, while the U.K.’s recently launched Faraday Institution is set to receive millions of pounds in government funding to bolster Britain’s battery R&D and commercialization landscape.

Electrification will play a key part in the shift to a fossil free transport system,” said Scania’s CEO and president Henrik Henriksson. “However, the current battery cell technology must be developed to fulfil the business requirements of heavy bus and truck customers. With Northvolt as a partner, we believe that we can make major strides forward.”

In addition to working together on developing suitable battery cells for large EVs, the two companies have also entered into an off-take purchase agreement for the battery cells that are produced.

Next month pv magazine publishes an Energy Storage special in collaboration with Energy Storage Europe that digs deeper into Europe’s battery production landscape – be sure to get hold of a copy.