Northvolt raises funds to establish lithium-ion battery gigafactories
Northvolt announced the agreement of a $1 billion equity capital raise to enable the establishment of a gigafactory for lithium-ion battery cells, Northvolt Ett, in Skellefteå, Sweden. In cooperation with the Volkswagen Group, the company also announced plans to establish a second gigafactory with an intended location in Lower Saxony, Germany.
“Today is not only a great milestone for Northvolt, it also marks a key moment for Europe that clearly shows that we are ready to compete in the coming wave of electrification, and that we will do so using battery cells which carry the lowest CO2 footprint possible,” said Peter Carlsson, Co-founder and CEO of Northvolt.
Volkswagen Group, together with funds managed by the Merchant Banking Division of the Goldman Sachs Group, will lead the equity fund raising alongside equity being provided by the BMW Group, AMF, Folksam Group, and IMAS Foundation. The transaction is subject to approval from the Swedish Competition Authority.
As previously announced, the European Investment Bank has approved in-principle a $400 (€350) million loan as a part of the total funding for Northvolt Ett. Together with additional debt being raised, the establishment of the initial 16 GWh of lithium-ion battery cell manufacturing capacity at Northvolt Ett is enabled. Building construction work will begin in August, with large-scale production estimated to begin in 2021.
Northvolt Ett will serve as Northvolt’s primary production site, hosting active material preparation, cell assembly, recycling, and auxiliaries. The gigafactory will be expanded to at least 32 GWh.
“With these world-class financial and industrial partners coming together and getting behind our mission, we see a tremendous opportunity and momentum for further capacity expansion and product innovation over the coming years. This is only the beginning,” said Peter Carlsson.
In addition to the gigafactory in Sweden, Volkswagen and Northvolt plan to set up a 50/50 joint venture to establish a 16 GWh battery cell factory with an intended location in Salzgitter, Lower Saxony, Germany. Volkswagen is investing around $1 billion (€900 million) in joint battery activities with Northvolt. Part of the amount is intended for the joint venture, and another part of the total amount will be invested directly in Northvolt. The production facility is scheduled to start manufacturing battery cells for Volkswagen from late 2023 or early 2024 and could be increased to 24 GWh over the following years.