Northvolt: building one of Europe’s largest battery factories

Stockholm - Swedish electric car battery maker Northvolt, founded in 2016 and which recently received a $14 billion (11.7-billion-euro) order from Volkswagen, has ambitious plans to become one of Europe's largest battery makers.

 

- 'Gigafactory' -

 

At the heart of Northvolt's plans is what the company calls a "gigafactory" for producing batteries aimed at supplying the growing electric vehicle market.

The factory, dubbed Northvolt Ett (Northvolt One), is being built in the northern city of Skelleftea.

According to the company, the factory will be powered by 100 percent clean energy and large-scale production is expected to commence at some point this year.

Northvolt has previously said production will "have a capacity of at least 32GWh by 2024," which would mean batteries for about 600,000 electric vehicles per year.

However, the Volkswagen deal announced on Monday would see the capacity upgraded to at least 40 GWh just to cover the supply to the German automaker.

The basic components of lithium-ion batteries

 

- Quick growth -

 

Even though the company has only existed for five years, it employed over 1,000 people by 2021.

In addition to the main facility in Skelleftea, it has also set up a facility for research and development in Vasteras, some 100 kilometres (62 miles) west of Stockholm.

In October 2018, the company announced it was also establishing a facility "designed for industrialisation and assembly of battery modules," in Gdansk Poland, and said production commenced in the spring of 2019.

Another factory, Northvolt Zwei, was announced in September 2019 and was to be placed in Salzgitter Germany and set up as a joint venture with Volkswagen, but Northvolt announced it was selling its stake in March 2021 to VW.

The company was co-founded by its current chief executive Peter Carlsson, and chief operating officer Paolo Cerruti, both of whom previously worked as supply chain managers at Tesla.

 

- Big name investors -

 

While Northvolt itself may be still be relatively unknown, its rapid expansion has been driven by its ability to establish partnerships and secure investments from some of the biggest players in the automotive business.

In June 2019, the company announced it had raised $1 billion in equity capital, securing the funding for its "gigafactory".

The investments were led by Volkswagen and Goldman Sachs but also included German carmaker BMW, as well as Swedish pension fund AMF, insurer Folksam, the IMAS Foundation which is part of the IKEA Group, as well as Spotify founder Daniel Ek.

How electric cars work 

 

- International competition -

 

Northvolt represents one of Europe's hopes to compete with China, which is the leader in the field of battery manufacturing, and US giants like Tesla.

In February the newly formed Italvolt announced plans for 45 GWh factory in Italy, and CATL, the Chinese market leader in battery production, is building a factory in Erfurt in Germany.

US electric automaker Tesla is also planning a "gigafactory" of its own in Germany.

Last week, EU Commission Vice President Maros Sefcovic said he expected Europe to be able to manufacture all the lithium-ion batteries needed for the continent's automakers by 2025.

That assessment is banking on the European Battery Alliance, sometimes described as the "Airbus for batteries," which was launched in 2017, in order to secure a competitive European battery industry.

Europe today accounts for only three percent of world battery cell production.