Swedish battery maker Northvolt introduced that it has raised $1.6 billion of debt, greater than doubling its capital because it readies its first manufacturing facility.
Northvolt is within the strategy of constructing its first gigafactory, Northvolt Ett, in northern Sweden, with a second, Northvolt Zwei, deliberate to observe in Germany in a couple of years. As of final summer time, the privately owned startup mentioned it had an order pipeline totaling $13 billion, and earlier this month it added one other €2 billion ($2.four billion) order from BMW.
The brand new debt funding shall be used to assist push Northvolt Ett over the end line and into manufacturing by subsequent yr, beginning with 16 gigawatt-hours of manufacturing with the potential to scale to 40 GWh. Northvolt Zwei is focusing on business operation in 2024.
Since its founding simply 4 years in the past, Northvolt has developed shut relationships with numerous companions and potential purchasers, together with ABB, Siemens, Vattenfall and Volkswagen. In Might, Volkswagen paid €450 million to take a 50 p.c share in Northvolt Zwei. The German auto big is anticipated to be the world’s largest EV producer by 2030.
Northvolt’s new loans got here from a consortium of pension funds in addition to business and public banks, together with German growth financial institution KfW and the European Funding Financial institution (EIB).
“The truth that now we have these world-class monetary establishments supporting a brand new trade in Europe is a transparent signal of the place the markets are headed and the chance that brings for sustainable tasks,” Northvolt CFO Alexander Hartman mentioned in a press release.
EU sends proper indicators on power storage
The electrical-vehicle sector stays the principal motivation for battery manufacturing investments globally, though the stationary power storage market can also be set for fast development. (Extra right here on GTM Squared.)
Recurring help for the EV sector from the EIB, which funds tasks aligned with the EU’s coverage objectives, reveals the energy of help amongst EU management. On the identical time, battery manufacturing is considered as important to guard Europe’s 13 million jobs within the auto sector whereas creating extra alongside the best way.
Germany and France are set to supply as a lot as €1.three billion of public funds for an formidable cross-border plan: Saft, a subsidiary of French oil main Complete, will make batteries for Groupe PSA, which incorporates German automotive model Opel and France’s Peugeot and Citroen. The challenge has a complete worth of as much as €5 billion and would see two factories of 24 gigawatt-hours every developed in France and Germany — a scale of funding akin to Northvolt’s.
A monetary resolution on Saft’s manufacturing facility received’t come till a pilot line has been assessed.
Assembly the EU’s 2050 net-zero goal would require not solely fast EV adoption but additionally large deployment of wind and photo voltaic. With that comes the necessity for dozens of gigawatts’ price of flexibility from interconnectors, demand response and power storage.
“The momentum for electrification is stronger than ever,” mentioned Northvolt CEO Peter Carlsson in a press release. “Our prospects want giant volumes of high-quality batteries with a low CO2 footprint, and Europe should construct a totally regionalized worth chain to help them.”
For a deeper take a look at Europe’s future as a battery manufacturing hub, learn GTM Squared right here.