Image: Volvo

German chemicals giant BASF announced on Monday that it has chosen the Finnish western town of Harjavalta as its first location for a battery production plant which will serve the European electric vehicle market.

BASF said the Harjavalta project is a part of the company's 400 million euro investment plan and that it already started initial production of battery materials this year.

When the facility fully starts up in late 2020, the firm said it will be able to supply batteries required for some 300,000 fully-electric vehicles per year.

The firm said the new plant will "utilise locally-generated renewable energy resources including hydro, wind and biomass" fuels.

The plant will be built adjacent to the Nornickel nickel and cobalt refinery owned by Russian mining firm Norilsk Nickel, a company which has signed a long-term, "market-based supply" agreement to supply BASF with nickel and cobalt from its metal refinery, according to a joint press release issued by the companies on Monday.