VW-funded Northvolt expands with $1.1 billion investment


  • Swedish battery maker Northvolt has secured $1.1 billion in investment from the likes of Goldman Sachs and Volkswagen Group.
  • The company will use this capital injection to ramp up production at its Schelefteo plant and build additional facilities across Europe to fulfill orders worth $55 billion from BMW, Scania, VW and Volvo.
  • The 100% Clean Energy Gigafactories in Borlänge and Gothenburg, Sweden are under development, while an additional facility near Heide, Germany is due to be commissioned in 2023.

    After a period of capital raising, battery specialist Northvolt has announced the signing of a $1.1 billion convertible bond. With 15 investors ranging from investment giant Goldman Sachs to Swedish mutual insurer Folksam Group and automakers such as Volkswagen Group, the company is now ready to expand its production capacity and supply more batteries from its current production lines. The capital injection comes at a key time for the company, given $55 billion in orders from key automakers such as BMW, Volvo, Scania and Volkswagen.

    “The combination of political decision-making, customers committing even more strongly to the transition to electric vehicles, and a very rapid increase in consumer demand for cleaner products has created a perfect storm for electrification,” said Peter Karlsson, co-founder of the company and CEO.

    Operating in factories in Borlänge and Skellefteå, Sweden, Northvolt both builds facilities and manufactures batteries. While Borlänge’s latest gigafactory is still under development, the company was able to produce its first lithium-ion battery at the Skellefteå plant in December 2021. The first commercial deliveries happened shortly after in May 2022, and now Northvolt is about to continue to develop upward production.

    Northvolt's lithium-ion battery plant in Skellefteå, Sweden

    Northvolt’s lithium-ion battery plant in Schelefteo, Sweden.


    Once the Borlänge cathode facility opens in 2024, the company is counting on an additional 100 GWh per year. The hydro and wind-powered Skellefteå plant currently operates with a total capacity of 60 GWh. A third gigafactory is also in the works, which will produce lithium-ion batteries near the northern German city of Heide by 2025.

    Northvolt has said it produces the world’s greenest batteries, a promise that has become central to the selection of manufacturing facilities. The Borlänge plant is set to use 100% clean energy once it opens, and the upcoming Heide facility is deliberately placed in Germany’s Clean Energy Valley in addition to serving as a battery recycling site. Overall, the company has committed to sourcing 50% of its required raw materials from recycled sources by 2030.

    christopher gorelczenko shows a prototype Northvolt battery

    Christopher Gorelchenko, Senior Director of Commissioning at Northvolt, shows off a Northvolt battery cell prototype.


    “If you use coal in your production, you build enough CO2 into your battery, but if we use clean energy, we can create a very sustainable product,” Carlsson said. “Our philosophy is that new energy-intensive industries, such as battery manufacturing, should be established in real geographic proximity to where clean energy is produced.”

    In line with this thinking, a manufacturer-specific gigafactory will open next year in Gothenburg, Sweden. Serving Volvo and Polestar, the gigafactory is being built in collaboration with the automakers and is due to be operational in 2025. Not only will the plant, with an annual capacity of 50 GWh, be powered without the use of fossil fuels, but also its proximity to Volvo’s headquarters in Gothenburg will limit pollution caused by transport. Once the site 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 vasterås, Sweden

    A look inside Northvolt’s lab in Västerås, Sweden.


    Many of these plans have yet to come to fruition, but the financial backing of international investment firms signals some confidence in the growing EV market. Likewise, the conundrum of the environmental impact of EV production and use is one that Northvolt takes head on. Although the promises of Northvolt have not yet been fully realized, clean battery production will be a major aspect of the future of the automotive industry. AsEV battery shortages flare today, companies like Northvolt aim to make up the gap for tomorrow.

    This content is created and maintained by a third party and has been imported to this page to assist users in providing their email addresses. You may be able to find more information about this and similar content on piano.io

Leave a Comment