Swedish battery manufacturer Northvolt is set to build a production facility for electric vehicle batteries in Schleswig-Holstein, Germany, having made the project dependent on subsidies, among other things. Though the company was hesitating on the matter, it seems more likely that the original plans will go ahead. This project is worth billions and is expected to create numerous new jobs in the region.
The US Government’s Inflation Reduction Act, which supports such industrial projects with subsidies, held a central spot in Northvolt’s planning while the EU wants to promote industrial production similarly. The “Temporary Crisis and Transition Framework” (TCTF) is being prepared to provide funding. This framework falls under the state aid law that EU states can use to design support measures. Talks are in progress between the EU Commission and the federal government and if the Commission approves the financing, Germany will apply the TCTF for the first time.
In the event of approval, the subsidy will unlock multi-billion dollar private investments that will create 3,000 jobs along with thousands more in the surrounding service and industry sectors, according to a joint statement by Northvolt, the federal ministry of economics, and the state government. It is expected that the first battery cells will leave the factory situated 100 km northwest of Hamburg in Heide by 2026, providing 60 GWh of production annually and supplying around a million electric cars with battery cells.
Northvolt CEO, Peter Carlsson, had previously cited Germany’s comparatively high electricity prices and higher subsidies in the US as reasons for delaying construction in Schleswig-Holstein. However, with the German government’s commitment and locational advantages of large quantities of wind power generated at sea and on land, Northvolt plans to push ahead with preparations and obtain the final building permit.
