NorthVolt raises $1.6bn for European battery gigafactories

NorthVolt raises $1.6bn for European battery gigafactories

Business news |
By Nick Flaherty

Battery maker NorthVolt has raised $1.6bn for two gigafactories. The borrowing brings the total raised to over $3bn for the massive lithium ion battery cell plants in Skellefteå, Sweden, and Salzgitter, Germany.

The company is also making significant investments in battery cell technology, process development and recycling at the recently established industrialization factory, Northvolt Labs, in Västerås, Sweden, which produced its first battery cells in late 2019.

The European European Investment Bank (EIB) contributed a $350 million loan for the first plant, Northvolt Ett, under construction in Sweden (shown above).

“The EIB and the Commission are strategic partners under the EU Battery Alliance, working closely with the industry and Member States to put Europe on a firm path towards global leadership in this strategic sector,” said European Commission Vice-President in charge of the European Battery Alliance, Maroš Šefčovič. “Northvolt has been among our frontrunners, set to build Europe’s first home-grown Gigafactory for lithium-ion battery cells, with a minimal carbon footprint. By supporting this state-of-the-art project, we also confirm our resolve to boost Europe’s resilience and strategic autonomy in key industries and technologies.”

“Since the creation of the European Battery Alliance in 2018, the EIB has stepped up its support for the battery value chain in order to help build Europe’s strategic autonomy in a technology that is key to its competitiveness and low carbon future. I believe that EIB financing support for Northvolt has been a textbook example of how our financial and technical due diligence can help crowd in private investors to visionary projects,” said Andrew McDowell, EIB Vice-President.

Peter Carlsson, Co-founder and CEO of Northvolt, said: “The EIB has played a key role in making this project possible from the very beginning. We are tremendously grateful for the support we have received from them and the European Union. Europe needs to build its own supply chain for large-scale battery manufacturing and the EIB is a true cornerstone of that process.”

The company has deals with Volkswagen and BMW to supply batteries for electric vehicles. “The momentum for electrification is stronger than ever. Our customers need large volumes of high-quality batteries with a low CO2 footprint, and Europe must build a fully regionalized value chain to support them,” said Peter Carlsson, co-founder and CEO, Northvolt.

Northvolt Ett in Sweden is scheduled to start production next year with a capacity of 16GWh, rising to a total of 40GWh. The planning process is underway for Northvolt Zwei, which is a joint venture together with the Volkswagen Group and scheduled to commence operations in 2024 with a potential output of more than 20 GWh. Northvolt also has an operational battery systems factory in Gdańsk, Poland.

The company aims to supply a quarter of batteries in Europe by 2030, which would need production of 150 GWh each year which shows the scale of the challenge. It also aims to secure 50 percent of its raw material requirements from recycled batteries through a full-scale recycling facility at Northvolt Ett.

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