Volkswagen AG said March 21 that it formed the European Battery Union with Swedish lithium-ion battery maker Northvolt AB in a bid to boost Europe's expertise in electric-vehicle battery cell research and development.

The German automaker said research and industry partners from seven EU member states are joining the consortium, which is expected to start at the beginning of 2020, and will share results of research work.

The company said in the release that the planned research activities under the European Battery Union, or EBU, which will cover the entire battery supply chain from raw materials through cell technology to recycling, could get financial support from the German Federal Ministry for Economic Affairs and Energy.

European companies, including chemicals giant BASF SE, stepped up plans in 2018 to localize EV battery production and development, a sector mostly dominated by Asian players like Samsung SDI Co. Ltd., Toshiba Corp., Panasonic Corp., Toshiba Corp. and LG Chem Ltd.

In November 2018, the German government announced €1 billion in investments through 2021 to set up domestic production facilities of lithium-ion battery cells. At that time, VW was said to be keen on joining a battery production consortium.

Reuters reported March 15 that Bayerische Motoren Werke AG, German battery-maker Varta AG and four other German companies have requested state funding for projects to develop EV battery cells. On its part, VW rival BMW previously teamed up in October 2018 with Northvolt and recycling firm Umicore SA to develop a sustainable value chain for battery cells for electric vehicles in Europe.

Northvolt, a company founded by two former Tesla Inc. executives, started work in 2018 on a €4 billion gigafactory in the municipality of Skellefteå, Sweden. Later in the year, it also began work on a new battery module manufacturing facility in Gdansk, Poland, with an initial annual capacity of 10,000 modules.