Northvolt Raises $1.3 Billion for Expansion of EV Battery Plants

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Swedish electric vehicle (EV) battery maker Northvolt (Stockholm, Sweden) has raised 1.2 billion euro (US$1.3 billion) to expand its manufacturing operations in Europe and into the U.S.

The funding is an extension of the US$1.1 billion convertible note signed in July 2022 and is led by the Investment Management Corporation of Ontario (IMCO), BlackRock Incorporated and Canada Pension Plan Investment Board (CPP Investments), and long-term financial partner OMERS, making its third major investment in the company.

Peter Carlsson, co-founder and chief executive officer of Northvolt, commented: "I'm proud to see our continued effort being recognized by investors, as we are receiving significant interest from capital markets to support our mission. The commitment to global decarbonization is strong, and these milestones reinforce our position to meet the massive demand for sustainable battery solutions both in Europe and North America."

The announcement comes as the company begins commissioning its first battery systems plant, Northvolt Dwa, in Poland. The plant has assembled its first battery energy storage system (BESS) products in Gdańsk, Poland as part of its commissioning process. Although producing products on a smaller scale since 2019, a new 25,000-square-meter plant expansion will allow for much larger scale production of BESS for the energy storage and industrial markets. Deliveries are expected to commence later in the year. The plant started with a capacity of 5 gigawatt-hours (GWh) which will now be boosted to 12GWh.

Northvolt has now secured more than US$9 billion in equity and debt to deliver on over $55 billion in orders from key customers, including BMW (Munich, Germany) and Volkswagen AG (VW) (Wolfsburg, Germany). The company is also in the process of building its first plant in Germany. Its third gigafactory will be based in Germany's so-called "clean energy valley", at Heide, Schleswig-Holstein, in the north of the country. The Northvolt Drei plant's annual potential production capacity of 60 GWh, enough for roughly 1 million EVs. It will boost the company's overall production capacity to 170 GWh, much of it still under development. Commissioning is planned for 2025 and more than 3,000 jobs will be created. For additional information, see March 28, 2022, article - Northvolt Powers Ahead with New German Battery Plant.

Northvolt battery cells are currently designed and developed at Northvolt Labs in Västerås, Sweden, and Northvolt Cuberg in San Leandro, California, U.S. Battery cell manufacturing is ramping up at Northvolt Ett gigafactory, in Skellefteå, Sweden, which will be joined by an adjacent giga-scale recycling plant, Revolt Ett, due to start operations later this year. Additional projects are under development in Sweden, Germany and Portugal.

"We have found a committed group of investors that understands both the urgent need and massive financial potential in enabling the swift electrification of society," said Alexander Hartman, chief financial officer of Northvolt. "However, there is a long road ahead if Europe and North America are to reach their full potential as leaders of the energy transition. To create a pathway for global warming below 1.5°C, both the private and public sector need to mobilize resources at an unprecedented scale."

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