Northvolt Gets $525 Million German Loan Guarantee
Northvolt, the Swedish battery cell startup, has expanded its war chest to more than $3.1 billion.
The latest win is a $525 million loan guarantee from the German government. The company secured a $1 billion investment from Volkswagen last year and $1.6 billion in financing last month.
Northvolt also has landed a $2.3 billion order from BMW, an early investor, to supply the carmaker with lithium-ion batteries beginning in 2024.
Co-founded in 2017 by two former Tesla executives, Northvolt has established relatively low-volume production at a lab/pilot plant in Vesteras, Sweden.
The company expects to open a $4 billion factory in Skelleftea, Sweden, next year. The facility will launch with an initial capacity equal to 16 gigawatt-hours of energy. Capacity is scheduled to double to 32 GWh by 2024 and eventually climb to 40 GWh.
As part of last year’s VW investment, Northvolt formed a 50:50 venture to make batteries in Zwei, Germany. Construction of that facility is slated to begin next year, with production beginning in early 2024 at an annual pace of 20 GWh.
A third plant in Europe is to follow. Northvolt hopes to amass 150 GWh of capacity in Europe by 2030, twice its original target.
The company’s goal is to capture 25% of battery sales in Europe, a market currently dominated by suppliers based in China and South Korea. Annual demand in Europe has been forecast to expand well beyond $100 billion by 2030.
Several European ventures and consortiums also are racing to establish local battery supply bases in the region. Much of the effort is backed by a $3.5 billion initiative launched by the European Union last December. The initiative expects to attract another $5.5 billion in private funding.
Asian producers, meanwhile, also are rushing to open cell and battery production centers in Europe. Among them are China’s CATL (Contemporary Amperex Technology Ltd.) and SVOLT; and South Korea’s LG Chem, Samsung SDI and SK Innovation.
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