Sweden’s Northvolt has won a $14 billion order from Volkswagen over 10 years, which selected it as a strategic lead supplier for premium battery cells in Europe, while the carmaker also increased its ownership in Northvolt.

In total, Northvolt said it has now secured in excess of $27 billion worth of contracts from key customers.

The Northvolt Volkswagen partnership will be centred around Northvolt’s gigafactory in Sweden, which will be expanded to achieve further economies of scale, reduced complexity and a better environmental footprint for the product, Northvolt said.

Northvolt will sell its joint venture share in Salzgitter, Germany, to Volkswagen as the automotive company  scales  up its battery manufacturing efforts in Europe.

“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 as they rapidly expand their fleet of electric vehicles,” said Peter Carlsson, Co-Founder and CEO, Northvolt.

The next step in the partnership is the result of a mutual analysis on how to best leverage the strengths and ambitions of each party during the years to come.  By consolidating cell production to the Northvolt Ett gigafactory, the partners will achieve further economies of scale, thereby securing the best possible cost and enabling the lowest environmental footprint in the world for cell production.

“Volkswagen will continue to deepen the collaboration and partnership with Northvolt. They are one of our key battery suppliers as we make the transition to electric mobility – and there is potential to expand this partnership even further,” said Thomas Schmall,  Chairman of the Board of Management of Volkswagen Group Components.

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