National Business Wire (Jan 9) -- The European Commission announced Monday that it approved 902 million euros ($986 million) in German aid for Swedish battery maker Northvolt AB's construction of an electric vehicle (EV) battery plant.

According to a release, the German aid will take the form of a €700 million direct grant and a €202 million guarantee.

The European Commission noted that the German aid was necessary and "without the aid, Northvolt would establish the plant in the United States" instead of in Heide, a small northern German town.

The plant, which will have an annual capacity of 60 GWh, is set to start production in 2026 and reach full capacity in 2029.