Swedish battery manufacturer Northvolt has announced plans to build a gigafactory, with an annual production capacity of 60GWh, in northern Germany.

The Northvolt Drei plant will be built in Heide, Schleswig-Holstein, and will be engaged in the production of lithium-ion batteries for the European market.

It will produce enough batteries to meet the requirements of nearly one million electric vehicles a year.

The manufacturing facility is expected to start production in 2025 and create an estimated 3,000 jobs in the region.

Northvolt said that its facility will be powered by the ‘cleanest’ electricity grid in Germany.

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By GlobalData

Northvolt co-founder and CEO Peter Carlsson said: “We’re excited to announce Northvolt Drei – a project which fits well into a promising future cluster of clean technology ventures emerging in northern Germany and advances the wider European transition towards a sustainable society within which Germany plays a crucial role.

“It matters how we produce a battery cell. If you use coal in your production, you embed a fair amount of CO₂ into your battery, but if we use clean energy, we can build a very sustainable product.

“Our philosophy is that new energy-intensive industries, such as battery manufacturing, should be established in actual geographical proximity to where the clean energy is produced.”

Northvolt said that its factory will source raw material from recycled battery metals as part of its commitment to procuring 50% of its raw material needs from recycling by 2030.

The company also plans to build a battery recycling plant at the site to reuse by-products from the production process.

Last June, Northvolt raised $2.75bn in equity to expand its battery cell production capacity at its factory in northern Sweden.

The company’s first factory is located in the northern Swedish town of Skelleftea, while its second facility will be located in Gothenburg.