Europe Plans First Battery 'Gigafactory'

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe is to get its own giant battery production plant as former senior executives of Tesla Motors Incorporated (NASDAQ:TSLA) (Palo Alto, California) have announced plans for a 4-billion euro ($4.3 billion) "Gigafactory" in the Nordic region.

Northvolt (Stockholm, Sweden), formerly SGF Energy AB, has announced plans to build Europe's largest lithium-ion battery plant within the next four years, with production expected to start in 2020. The plant will have an annual production capacity of 32 gigawatt hours (GWh) by 2023. This puts it on scale similar to Tesla's lithium-ion auto battery Gigafactory, which is under construction near Reno, Nevada, and which will have a capacity of 35 GWh. The company is working with a variety of Swedish authorities to locate a suitable site. Northvolt is only considering municipalities that can offer sites with at least 500,000-700,000 square metres (m2) ready for ground preparation with a complete industrial zoning permit in place. Power supply to the site must have "an exceptionally strong grid connection", the company added.

The company is being headed by two former Tesla senior executives, Peter Carlsson, Northvolt's chief executive officer, and Paolo Cerruti, Northvolt's chief operating officer.

"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", Carlsson explained.

The company will base its template on one "inspired by the semiconductor industry", which Carlsson said will focus on scale, customised customer solutions, vertical integration and highly controlled manufacturing.

"This is a bold, very complex, but rational project", said Cerruti. Compared with Asia and the U.S., Europe is behind in the battery industrialisation. 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."

The company has attracted some heavyweight backers, including Swedish energy major Vattenfall (Stockholm, Sweden).

"Northvolt is the most interesting and exciting battery project in Europe today,", commented Andreas Regnell, Vattenfall's head of strategy and member of Northvolt's advisory board. "Vattenfall has a clear strategy of supporting the energy transition and climate-smart solutions. Electricity storage will be a significant factor in the transition, mostly in the transport sector and also the energy system at large."

Europe lags far behind the United States and Asia when it comes to investment in lithium battery production. Industrial Info is tracking seven lithium-ion battery projects totalling $5.35 billion in investment. For additional information, see February 7, 2017, article--U.S. Battery Manufacturing Industry Continues Growth.

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