Germany kicks off construction of electric car batteries’ gigafactory after swift approval

Germany secured the construction of a gigafactory for electric car batteries in record time with the help of the EU’s new subsidy “matching” scheme.

On Monday, Chancellor Olaf Scholz (SPD/S&D), among others, inaugurated the start of construction of the Swedish car battery manufacturer Northvolt’s gigafactory in Dithmarschen, in the northernmost state of Schleswig-Holstein.

The project itself moved through the German bureaucracy with unusual speed.

People in the region “don’t talk, they just do it,” he said, calling it the “Dithmarschen tempo”, referring to the surrounding community and his plans to speed up administrative planning and approvals.

He proclaimed that one “could wish for a lot of Dithmarschens in our country.”

Northvolt’s decision to locate in Germany is partly because the EU has given batteries for electric vehicles strategic importance in achieving the EU’s climate goals, especially in the face of a market dominated by China.

Earlier this year, Germany was the first EU country to benefit from the European Commission’s new ‘matching’ subsidy scheme. This allowed Robert Habeck, Germany’s minister for the green economy, to counter a subsidy offer from the US, managing to attract Northvolt to his home state of Schleswig-Holstein instead.

The Commission approved state aid of around €902 million, and about two weeks later, at the end of January, the two municipalities concerned accepted the plans.

A year prior, Northvolt CEO Peter Carlsson stated in an interview with Handelsblatt that “the subsidy policy in the USA seems to me to be a little simpler and more coherent than that in the EU.”

Ultimately, the EU measures convinced the company to choose Europe, with plans to create 3,000 jobs in Dithmarschen and invest €4.5 billion in the project.

Northvolt’s decision was also influenced by new EU legislation passed last year to ensure that car batteries are sustainably produced in Europe.

“Northvolt looked for this specific location throughout Europe. And the decision favouring Dithmarschen was essentially due to the density of renewable energies,” Habeck told journalists.

“The electricity is green and available in large quantities,” he added.

According to NDR, the municipality of Dithmarschen, with its 888 onshore wind turbines, is one of the leading wind energy regions.

“You can see that climate protection, as in the production of renewable energy, and industrial development go well together,” Habeck added.

Scholz pointed out that “Germany was, is and will remain a strong industrial country,” adding that “the manufacture of great cars will remain the backbone of our industry beyond the combustion engine”.

(Kjeld Neubert | Euractiv.de)