Scania signs deal with start-up for battery cells
Scandinavian truck maker has signed a deal with Swedish company Northvolt to gain access to greater battery inventory
Scania has increased access to battery capacity by signing a deal with start-up company Northvolt, likely to be in the range of a handful of gigawatts per year.
The move comes against the backdrop of a major investment drive by parent company Volkswagen to increase their ability to produce battery vehicles. Volkswagen’s plan includes $50 billion set aside for building a supply chain and retooling for electrification.
Scania is also considering an equity investment in Northvolt, which seeking to raise equity.
“There will be a shortage of batteries for the automotive sector globally in the coming five to six years because there’s simply not enough capacity,” said Scania Chief Executive Henrik Henriksson. “So, the more capacity we can get our hands on, the better we feel.”
It is this capacity crunch that is driving the deal and potential equity investment, as a variety of auto makers fight for what is currently limited capacity to produce the most expensive part of electric vehicles.
“We’re participating in both the discussions about how to secure future capacity and volume commitments,” Henriksson said, which makes Northvolt important, as it plans to build a Swedish plant, which will be Europe’s biggest battery production facility and has aims for a second in Germany. This capital investment is expensive, however, which is why Northvolt is looking for funding to the tune of €1.5 billion.
Scania also chose Northvolt as it can develop batteries specifically for trucks, which face a number of challenges that make car batteries relatively in appropriate. Firstly, charging times are too long and there are major trade-offs currently between the weight of the battery, the range and the payload, with each extra battery returning less value for its weight due to smaller gains in range and less payload.
This makes it likely that Scania will focus batteries acquired from the deal into the production of hybrid trucks.
Parent company Volkswagen is also reportedly building up to produce its own batteries.