| 2:53 PM EST

Northvolt Gets $525 Million German Loan Guarantee

Startup’s funding war chest tops $3.1 billion
#Samsung #LG #Volkswagen

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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.

  Rendering of Northvolt’s battery cell plant in Skelleftea, Sweden (Image: Northvolt)


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.

Three Plants

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.

What’s Next

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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