Swedish lithium-ion battery producer Northvolt secured EU approval for 902-million-euro in German state aid to build an electric vehicle battery production plant in the north of Germany.

According to the European Commission  the plant would accelerate the 27-country bloc’s green transition and reduce fuel dependencies, and that the German aid was necessary as without it, Northvolt would build the plant in the United States with support from the U.S. Inflation Reduction Act.

The German aid consists of a 700-million-euro direct grant and a 202-million-euro guarantee.

The plant, to be located in the city of Heide, will have an annual capacity of 60 GWh which translates to 800,000 to 1 million EV batteries per year, depending on the size of the battery. The production will start in 2026 and will reach full capacity in 2029.