The growth of the EV market rests on the back of the battery market. It’s all about batteries, batteries, batteries. One of the most well known battery producers in the world is Northvolt, which was founded by an ex-Tesla supply chain executive, Peter Carlsson, who is still CEO of Northvolt. We interviewed Carlsson in 2020 and were impressed by Northvolt’s vision, development plan, and holistically sustainable approach to the business. However, one thing the CleanTechnica team took away from the interview was that the company’s strong growth plans still weren’t nearly enough — that the automotive market needed far more batteries and Northvolt was positioned well to supply more of them. Now, it seems that Northvolt and a long list of financiers have been convinced they do have a bigger growth path and Northvolt has secured another $1.1 billion to support that.
To be specific, the $1.1 billion convertible note is meant to fund battery cell and cathode material production expansion in Europe. The list of investors involved in this capital raise is as follows: AMF, AP funds 1-4 (via the co-owned company 4 to 1 Investments), ATP, Ava Investors, Baillie Gifford, Compagnia di San Paolo through Fondaco Growth, Folksam Group, Goldman Sachs Asset Management, IMAS Foundation, Olympia Group, OMERS Capital Markets, PCS Holding, Swedbank Robur, TM Capital and Volkswagen Group.
Peter Carlsson noted in response to the capital raise: “We will continue to work hard to deliver on the promise we have made to them to build the world’s greenest battery.” That’s an interesting statement to make at such a time and a testament to the company’s deep, strong focus on environmental sustainability and climate action.
This $1.1 billion raise is a notable chunk of all the money Northvolt has raised since its launch in 2017. It brings that total to $8 billion in equity and debt. Considering that some of the investors are repeat investors from previous rounds, most notably Volkswagen Group, this also shows that they are happy with what Northvolt has been doing with the money so developing far and how it has been.
Now is certainly a key time to be accelerating investment in battery production, and it’s heartening to see that the people in the finance industry and at Northvolt with the ability to do so are seeing that and taking action. It provides hope. While $8 billion in investment is an enormous sum of money, much more is on the table to be made if Northvolt can execute well. “Presently, the company is developing manufacturing capacity to deliver on $55 billion in orders from key customers, including BMW, Fluence, Scania, Volvo Cars, and Volkswagen Group,” Northvolt writes. “A key aspect to Northvolt’s strategy involves establishing in-house competences and presence throughout the battery value chain, including cathode material production and recycling. Through its large-scale recycling program, Northvolt intends to enable 50% of its raw material requirements to be sourced from recycled batteries by 2030.”
We expect big things from Northvolt. It is just barely in phase one of a gigantic growth path, producing its very first commercial battery cell at its Northvolt Ett gigafactory in Skellefteå, Sweden, at the end of 2021, and delivering its first batteries to customers from that same initial factory in the spring of this year, 2022. It won’t be long until we’re reporting on massive quantities of battery cells shipping from multiple Northvolt batteries around Europe to automakers quickly making the transition from fossil fuel powered cars to fully electric cars. The European auto market is transitioning quickly to EVs, and Northvolt batteries will find their way into a growing portion of those EVs in the years to come.
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Featured image courtesy of Northvolt
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