Construction Begins on Northvolt Drei: Germany’s Strategic Investment in Sustainable Battery Production

On 25 March 2024, the groundbreaking ceremony for the Northvolt Drei battery gigafactory was held, signalling the start of construction of Europe’s latest gigafactory. The event was attended by German Federal Chancellor Olaf Scholz, Vice Chancellor Robert Habeck, Schleswig-Holstein’s Minister-President Daniel Günther, and the Swedish Ambassador to Germany Veronika Wand Danielsson. They were joined by Northvolt executives, including CEO Peter Carlsson and Northvolt Drei CEO Christofer Haux, to commence the industrial operations at the site located outside Heide.

Chancellor Scholz remarked on the strategic value of the Northvolt investment for Germany and the broader European market, highlighting the necessity of domestically produced battery cells to continue the country’s manufacturing base within the automotive sector.

The gigafactory is planned to leverage locally sourced wind energy, which is in line with Northvolt’s objective to produce batteries with minimal environmental impact. The facility is expected to employ approximately 3,000 people and aim for an annual production capacity of 60 GWh. The first phase of operations is scheduled to begin in 2026.

Northvolt CEO Peter Carlsson noted the project has received support from various stakeholders and invited individuals to contribute to the company’s mission. Regular engagement with the community in Dithmarschen has been established to ensure transparency and receptivity, with a significant majority of the local population reportedly in favour of the project.

Northvolt Drei CEO Christofer Haux acknowledged his team’s efforts in advancing the project to the construction stage and recognised the local community’s support, which is notable for a project of this scale in Germany.

The European Commission approved a €902 million aid package to Northvolt in January 2024 to support the establishment of the battery production facility. This approval falls under the State aid Temporary Crisis and Transition Framework, which aims to promote investments in key sectors for the green transition and to decrease reliance on fossil fuels. The Commission’s decision confirmed that the aid complies with Article 107(3)(c) TFEU and that the project is strategically important for transitioning to a net-zero economy. Additionally, the Commission noted that the aid is limited in its impact on competition and trade within the EU, is necessary to ensure the plant’s establishment in Europe, and is proportionate to the investment’s needs.

Image: Northvolt