With support from the likes of Goldman Sachs, the Swedish battery producer will heighten production and build new facilities.
JONATHAN NACKSTRANDGetty Images- Swedish battery manufacturer Northvolt has secured $1.1 billion in investments from companies like Goldman Sachs and Volkswagen Group.
- The company will use this capital injection to accelerate production at its Skellefteå plant and construct additional facilities throughout Europe to fulfill $55 billion of orders from BMW, Scania, VW, and Volvo.
- 100% clean energy gigafactories in Borlänge and Gothenburg, Sweden are in progress, while an additional facility near Heide, Germany is set to break ground in 2023.
After a period of capital raising, battery specialist Northvolt has announced the signing of a convertible note valued at $1.1 billion. With 15 investors ranging from investment giant Goldman Sachs to Swedish mutual insurer Folksam Group and automakers like Volkswagen Group, the company is now poised to expand its production facilities and deliver more batteries from its current production lines. The capital injection comes at a pivotal time for the company, given the $55 billion of orders from key automakers like BMW, Volvo, Scania, and Volkswagen.
“The combination of political decision making, customers committing even more firmly to the transition to electric vehicles, and a very rapid rise in consumer demand for cleaner products, has created a perfect storm for electrification,” said Peter Carlsson, the company’s co-founder and CEO.
Operating out of plants in Borlänge and Skellefteå, Sweden, Northvolt has been simultaneously constructing facilities and producing batteries. While the newest Borlänge gigafactory is still in progress, the company was able to produce its first lithium-ion battery cell at the Skellefteå plant in December of 2021. Inaugural commercial deliveries occurred shortly after in May 2022 and Northvolt is now on track to continue ramping up production.
Northvolt’s lithium-ion battery plant in Skellefteå, Sweden.
JONATHAN NACKSTRANDGetty Images
Once the Borlänge cathode facility opens in 2024, the company is counting on an additional 100 GWh annually. Currently, the hydro and wind-poweredSkellefteå plant operates with a total output of 60 GWh. A third gigafactory is also in the works, set to produce lithium-ion batteries near the North German town of Heide by 2025.
Northvolt has laid claim to producing the world’s greenest batteries, a promise that has become central to its production facility selection. The Borlänge plant is set to use 100% clean energy once opened, and the impending facility in Heide was intentionally placed in Germany’s clean energy valley in addition to serving as a battery recycling location. Broadly, the company has made a commitment to sourcing 50% of needed raw materials from recycled sources by 2030.
Christopher Gorelczenko, senior director of commissioning at Northvolt, shows off a prototype Northvolt battery cell.
JONATHAN NACKSTRANDGetty Images
“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,” Carlsson said. “Our philosophy is that new energy-intensive industries, such as battery manufacturing, should be established in actual geographical proximity to where the clean energy is produced.”
In line with this thinking, a manufacturer-specific gigafactory will break ground next year in Gothenburg, Sweden. Serving Volvo and Polestar, the gigafactory is being built in collaboration with the automakers and is set to become operational in 2025. Not only will the 50 GWh annual capacity plant be powered without the use of fossil fuels, but the proximity to Volvo’s headquarters in Gothenburg will limit transportation-induced pollution. Once the location is up and running, Northvolt claims it will be able to produce enough batteries for 500,000 Volvo and Polestar cars a year.
A look inside Northvolt’s lab in Västerås, Sweden.
Northvolt
Many of these plans are yet to be realized, but the financial backing of international investment firms signals some trust in the growing EV market. Similarly, the conundrum of the environmental impact of EV production and usage is one that Northvolt is taking head-on. Though Northvolt’s promises are yet to be fully actualized, clean battery production will be an essential facet of the future of the auto industry. AsEV battery shortages flare today, companies like Northvolt aim to make up the difference for tomorrow.
Keyword: VW-Funded Northvolt Expands with $1.1 Billion Investment