Former Tesla executive plans EUR 4 billion Swedish battery plant

The growing consciousness of the urgency to mitigate the effects of climate change is accelerating the transition to a fossil fuel free society. And according to Northvolt, an increased use of batteries is one of the cornerstones in this transition, enabling massive conversion to sustainable transportation. “We foresee a major deficit of lithium ion batteries within a few years, with limited current and planned capacity in place in Europe. There is a market window open. We have a solid business plan in place that enables us to produce high quality batteries at an affordable cost”, says Peter Carlsson, CEO at Northvolt. Northvolt plans to build a next generation battery factory – and the company’s plan includes a new concept inspired by the semiconductor industry, focusing on: scale, customized customer solutions, vertical integration and highly controlled manufacturing. According to the company the execution is fundamentally different compared to current battery production facilities. Creating a circular system is also a focus for the new company, and ambitions are high in regards to life cycle management, the approach is said to cover everything from the cradle to the grave. “This is a bold, very complex, but rational project. Compared with Asia and the US, Europe is behind in the battery industrialization. With societal ambitions when it comes to growth and sustainability, action is needed. The project resonates commercially, since the demand from automotive and energy storage sectors will be huge,” says Paolo Cerruti, COO of Northvolt. The company believes that batteries will enable the transition to a carbon neutral society. The auto industry alone will need batteries in huge numbers to replace fossil fuels with electricity – making a project like this look increasingly more commercially viable. Funding agreements from companies and organizations such as Stena, Vattenfall, InnoEnergy (European innovation ecosystem for sustainable energy), The Swedish Energy Agency and Vinnova (Sweden’s innovation agency) are in place. This support, together with private investments by the founders, lays the foundation for the first phase. Additional external funding will be needed at a later stage. The 32+ GWh production site will require a EUR 4 billion investment over a period of six years. The aim is to start construction in the second part of 2018 to enable volume manufacturing by the end of 2020. Northvolt is currently focusing on building the team and technical partnerships; detailing a blueprint for product processes and building customer partnerships. The company has, in collaboration with Business Sweden, initiated the site-selection process. Northvolt’s ambition is to decide where the factory will be built during mid-2017. Northvolt is only considering municipalities that can offer sites with at least 500’000-700’000 square-meters ready for ground preparation with a complete industrial zoning permit in place.