If everything goes well, Hungary will soon become the world's second largest battery producer. Many people are outraged by this, claiming that this is a dangerous and environmentally destructive industrial technology. But west of us, there is a deadly battle for new battery factories, and the European Union not only provides crazy amounts of money for this, but also, if necessary, a more flexible interpretation of the rules. The end result confirms them, everyone is happy: the governments, the battery manufacturers and the population as well.

While the construction of battery factories in Hungary has been highlighted for some time in the domestic public (typically in a negative light), similar EU projects are heard less often, Világgazdaság in its market summary.

However, investments in battery factories in the EU member states are mushrooming. As it turns out, the construction of one of the largest of these has already begun.

The location is Germany, and when completed, it will be a real gigantic battery factory.

The developer is none other than Northvolt, registered in Sweden, which who left the American electric vehicle manufacturer Tesla back in 2016. Already in the summer of 2019, it was reported that they had raised a billion dollars in capital, thereby securing the financing for the construction of their giga battery factory in Sweden, Northvolt One.

To date, it has received orders worth more than 50 billion dollars from giant companies such as BMW, Fluence, Scania, Volvo Cars and the Volkswagen Group. It is therefore a huge order book, but Northvolt can currently only supply batteries from its first gigafactory in Skelleftea, Sweden, and from the research, development and industrialization base of Northvolt Labs, which also operates in Vasteras, Sweden.

So it's no wonder that according to the current situation

he wants to build at least half a dozen giant factories (some of them have already been built), but for that he needs all the money in the world, with a slight exaggeration.

This is not a bad thing: January news that Northvolt received Europe's largest green loan of 5 billion dollars. This is provided by a group of 23 commercial banks, but the European Investment Bank (EIB) and the Northern Investment Bank (NIB), which received funds from the InvestEU program of the European Commission, also participated massively.

In other words, the EU is fully behind Northvolt and European battery production.

So far, Northvolt has collected more than 13 billion dollars in financing - which translates to more than HUF 4,800 billion - to build its factory network, which

  • the already mentioned Northvolt Etta from Sweden and
  • consisting of the expansion of the Polish Northvolt Dwa in Gdansk,
  • and Northvolt Drein in Heide, Germany,
  • the Northvolt-Volvo Cars joint venture, NOVO's Gigafactory in Gothenburg, the also Swedish (Borlange) Northvolt Fem,
  • for Northvolt Cuberg, destined for San Leandro, USA,
  • and finally to the recently announced Northvolt Six in Montreal, Canada

formed from its creation.

What do you need to know about the giga battery factory in Germany?

Less than a month ago, it was announced that the construction of Northvolt's gigabattery factory in Germany had started. The German elite, including the German green government, appeared at the festive event. There was

  • Federal Chancellor Olaf Scholz,
  • Vice-Chancellor Robert Habeck, Minister of Economy,
  • Daniel Günther, Prime Minister of Schleswig-Holstein,
  • Veronika Wand Danielsson, Ambassador of Sweden to Germany,
  • and CEO and co-founder of Northvolt, Peter Carlsson,
  • as does the CEO of Northvolt Drei, Christofer Haux.

Together, they started the pile driving machines, which began to erect the production halls in the industrial area of ​​the city of Heide in the district of Dithmarschen in northern Germany. You could catch a bird with Olaf Scholz, he was so happy with the development. It is understandable, since the Northvolt gigafactory is one of Germany's largest industrial investments.

"Such investments are of strategic importance for Germany and Europe. We need batteries made in Germany and Europe. So it is good news for the entire country that climate-friendly battery cells will be produced for one million cars here in the future"

said the chancellor.

According to the plans, the battery factory will employ approximately 3,000 people, and its annual capacity will reach 60 gigawatt hours. It will start operating in 2026, on more than 110 hectares. They promise that the necessary electricity will be obtained from wind energy. Recruitment for the Northvolt Drei gigafactory has already begun, and according to recent polls, 80 percent of the local community is positive about the project.

There was huge competition for the construction of the factory, including with the USA. Germany's victory comes at a price. The German press wrote that the German government will give Northvolt 900 million euros in the first round, of which 200 million euros are guarantees. In comparison:

Northvolt's battery factory in Germany would cost a total of 4.5 billion euros, of which 20 percent will be covered by German taxpayers' money.

This far exceeds what the US administration would have given, in fact.

We are talking about so much state money that it has already raised the possibility of illegal state aid. The fact that Germany got away with this is due to the fact that when the EU approved the financing of the German government, the European Commission applied more flexible rules for the first time,

citing that Europe should not fall away from investments just because higher state subsidies are available for companies on other continents.

Of course, the German government's generosity could also be due to the fact that Volkswagen is one of Northvolt's largest shareholders, and that BMW and Siemens are also heavily interested in the Swedish company.

Source: World economy

Cover image: Illustration, Photo: Northvolt Facebook