May 12, 2023

Northvolt to build German and US factories

The company had previously indicated the plans could be on hold

Freya Pratty

2 min read

Europe’s leading gigafactory startup, Northvolt, will go ahead with its plans to build its next factory in Germany after the federal government promised hundreds of millions of euros for the project.

The company confirmed to Sifted on Friday that it will also build a new factory in the US around the same time. 

Northvolt announced plans to build a factory in Heide, northern Germany, last year. It then indicated it may suspend those plans to concentrate on the US, where the Inflation Reduction Act (IRA), announced last year, offers significant subsidies to battery makers.


The news will be welcomed by Brussels, where policymakers have scrambled to draw up a European response and convince its home-grown climate tech companies to stay. 

An additional factory in Germany will boost the bloc’s battery capacity. Other projects in Germany include one from Chinese giant Contemporary Amperex Technology, the world’s biggest cell manufacturer, which started output at its plant in Erfurt this year.

“Backed by this commitment of the federal government, Northvolt has decided to take the next steps towards our expansion in Heide,” Northvolt cofounder and CEO Peter Carlsson said Friday. 

Northvolt’s new factory will produce 60GWh of battery capacity annually and create 3,000 jobs, the German government said.

German economy minister Robert Habeck said the funding will come from the temporary crisis and transition framework (TCTF), a new EU state-aid regime that was approved in March. 

The TCTF was set up after Russia’s full-scale invasion of Ukraine highlighted the vulnerability of Europe’s energy supply and will allow EU countries to provide subsidies for battery, wind and solar energy.

The site of Northvolt’s next factories has become an increasingly hot topic. Speaking to Sifted last month, Northvolt cofounder Paolo Cerruti said America’s climate bill had “been an immense catalyst for us reshuffling our industrial rollout plan.”

Update: This piece was amended to add that Northvolt will also build a US factory.

Freya Pratty

Freya Pratty is a senior reporter at Sifted. She covers climate tech, writes our weekly Climate Tech newsletter and works on investigations. Follow her on X and LinkedIn