Battery group Northvolt announced on Tuesday that it would build a battery factory in northern Germany, as Europe seeks to ramp up its capacity to produce electric cars.

The Swedish electric car battery specialist said it picked Heide in Germany’s northernmost state Schleswig-Holstein as it is known as a “clean energy valley” which is home to windfarms that would power the plant.

The new plant is expected to have an annual production capacity of 60 GWh – enough to supply around one million cars per year.

The factory could start production in 2025 and provide some 3,000 jobs, the company said in a statement.

Northvolt opened its first “gigafactory” in Sweden in December and the Heide factory will take its battery manufactuing capacity under development above 170 GWh gigawatt hours.

Schleswig-Holstein was selected as the “region hosts the cleanest energy grid in Germany, one which is characterised by a surplus of electricity generated by onshore and offshore wind power”, Northvolt said. “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,” Northvolt CEO Peter Carlsson said.

One of Europe’s leading battery hopefuls, Northvolt has already secured $50 billion (€44.6bn) worth of orders from European car giants including Germany’s BMW and Volkswagen, and Sweden’s Volvo.

One of Europe’s leading battery hopefuls, Northvolt has already secured $50 billion (€44.6bn) worth of orders from European car giants including Germany’s BMW and Volkswagen, and Sweden’s Volvo

Faced with China, which dominates the market, Europe accounted for just three per cent of world battery cell production in 2020 but aims to corner 25 per cent of the market by the end of the decade, with several factory openings planned.