Northvolt said on Monday it had won an order worth more than $14 billion over 10 years from Germany’s Volkswagen, which increases its stake in the Swedish lithium-ion battery maker.
Northvolt also said it will sell its share in joint-venture Northvolt Zwei in Salzgitter to the world’s No. 2 carmaker, which becomes the German gigafactory’s single owner.
Volkswagen, which established a partnership with Northvolt in 2019, has previously said that it owns around 20% of the Swedish firm.
Northvolt, which aims to take a key role in Europe to compete with major Asian players such as CATL and LG Chem, and targets a 25% European market share by 2030, said it had secured over $27 billion worth of contracts from key customers.
“By consolidating cell production to the Northvolt Ett gigafactory, the partners will achieve further economies of scale, thereby securing the best possible cost and enabling the lowest environmental footprint in the world for cell production,” it said in a statement.
Volkswagen, in the midst of a major shift towards battery-powered cars, plans to have six battery cell production plants operating in Europe by 2030 to secure supply for its electric vehicle ambitions, it said on Monday.
Battery makers across the world are seeking to keep up with demand as carmakers increasingly go electric. Investors have been rushing into the EV sector by pushing up valuations for companies such as Tesla and Lucid Motors.
Northvolt said last week it had bought U.S. startup Cuberg to get access to technology that would boost the range of electric vehicles that can use its batteries.
The firm, founded in 2016 by former Tesla executive Peter Carlsson, last raised $600 million from the likes of Volkswagen, Baillie Gifford and Goldman Sachs.