Swedish battery maker Northvolt will get 4,6 billion euros to expand its large battery factory in Sweden and the Revolt Ett recycling plant next door. It is the largest green loan given to a company so far in Europe, according to the European Investment Bank (EIB), which is issuing the loan with 23 commercial banks and the Nordic Investment Bank.
The investment should be seen especially in light of the battery battle currently developing between Europe and China/Asia on the one hand and America on the other.
The loan is primarily planned to finance Northvolt Ett, a cathode production and cell manufacturing plant currently under construction in Skellefteå, a city on Sweden’s Northeast coast that has long been known for its gold and copper mining industry.
Batteries for 1 million EVs yearly
Northvolt Ett is Europe’s first homegrown Gigafactory and runs on 100% renewable energy. Once construction is fully completed, the plant will produce cells for around one million EVs yearly.
According to Northvolt, the facility “recovers battery-grade metals with a carbon footprint 70% lower than mined raw materials, thereby enabling a fully integrated, circular battery production setup that has not previously existed outside of Asia”.
$55 billion worth of contracts
With this new fundraising, Northvolt has already raised over 13 billion dollars (11,9 billion euros) to realize its expansion in Europe and North America. The company is currently fully committed to project developments in home-based Sweden (Borlänge and Gothenburg), Poland (Gdansk), Germany (Heide), the US (San Leandro), and Canada (Montreal).
Northvolt, currently employing 5 000 people worldwide, has also won more than 55 billion dollars (50, 4 billion euros) worth of contracts from customers such as BMW, Scania, Volvo Cars, and Volkswagen.
New sodium-ion battery
Founded in 2016 by Swede Peter Carlsson, a former manager of electric-car maker Tesla, the company has since become Europe’s largest battery maker. In late November, the company announced that it had developed a new sodium-ion battery or “salt battery,” a technology that uses less strategic and coveted metals such as cobalt, nickel, and lithium.
In early January, the European Commission authorized the German government to give 900 million euros in state aid to Northvolt to build a battery plant in Germany.
Europe currently accounts for only 3% of global cell production. Still, it aims for 25% of the market by the end of the decade, just as it seeks to become more economically independent from China and the US.
The three power blocks are trying to become leaders in new green technologies to combat climate change, such as batteries for EVs. “We mean business when it comes to Europe’s battery industry,” said Maroš Šefčovič, Executive Vice-President of the European Commission in charge of the European Green Deal and the European Battery Alliance in a press release concerning the EIB loan. “It is strategically important and a key battleground for global competitiveness.”
Northvolt still struggles with production delays and is not yet profitable, losing at least 1 billion dollars last year (919 million euros).