The deal was a continuation of a partnership between the companies first unveiled in 2019, which would now “be further expanded to support a combined order worth more than $14 billion over the next 10 years”, Northvolt said.
“Volkswagen is a key investor, customer and partner on the journey ahead and we will continue to work hard with the goal to provide them with the greenest battery on the planet,” Northvolt chief executive Peter Carlsson said in a statement.
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Northvolt, which was founded in 2016, is currently building a “gigafactory” in the Swedish city of Skellefteå in northern Sweden, which the partnership will be centered around.
At the same time, Northvolt would sell its stake in a factory being set up in Salzgitter, Germany to Volkswagen, which also announced on Monday it was ramping up its shift to electric vehicles and would set up six battery factories in Europe by the end of the decade.
Northvolt also said Volkswagen would increase its stake in the company but did not specify to what extent.
Volkswagen has previously communicated it had a 20 percent stake in Northvolt.