Recently, the European Commission gave the green light to the initiative of the German government aimed at supporting the project of the Swedish group Northvolt.

This help has a form a substantial subsidy of 700 million euros, which is accompanied by a guarantee of 202 million euros. This is the first time that Brussels has authorized such assistance under the EU mechanism established in March 2023. to prevent the redirection of European investment projects to the USA.

The Cold War between Europe and the USA

In May 2023, Northvolt announced plans to build a giant factory in Heide, northern Germany, after Berlin pledged financial support. The decision comes after months of uncertainty, during which the company threatened to shift its investment to the United States, where subsidies have been higher in recent months.

The plant, located near the coast of the North Sea, will receive carbon-free electricity from giant wind farms. Northvolt also announced the development of a new sodium-ion battery technology in November that requires fewer strategic metals, thereby reducing dependence on China.

One of the largest battery plants

Northvolt’s German plant, the first outside Sweden, is expected to create 3,000 jobs. With an annual capacity of 60 GWh, it will be able to equip 800,000 to one million electric cars per yeardepending on the size of the batteries. Production will begin in 2026, and it will be brought to full capacity in 2029.

With this approval from the European Commission, the EU is for the first time specifically responding to the US Inflation Reduction Act (IRA), a massive $370 billion support plan aimed at boosting green industries and US factories.

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