Sweden’s Northvolt secures €1.6 billion in financing, aims to produce a quarter of Europe’s batteries

Swedish battery manufacturer Northvolt will receive loans worth €1.6 billion, bringing its total financing raised to €3 billion. The plan is to build two “gigafactories” jointly producing battery cells with a capacity of 60 GWh each year. Overall, Northvolt aims to achieve a 25% share of the European battery market by 2030.

Swedish company Northvolt announced that it had secured a €1.6 billion (CZK 42 billion) loan from a consortium of commercial banks, pension funds and public financial institutions. The European Investment Bank, together with the European Fund for Strategic Investments, will provide €350 million (CZK 9.2 billion) of this amount. Total debt and equity financing received for the development of automotive and industrial batteries and the construction of “gigafactories” will thus reach €3 billion (CZK 78.8 billion).

“Northvolt is one of the pioneers building Europe’s first gigafactory for lithium-ion battery cells, with a minimal carbon footprint. By supporting this state-of-the-art project, we are also confirming our commitment to improving Europe’s resilience and strategic autonomy in key industries and technologies,” commented Maroš Šefčovič, Vice-President of the European Commission responsible for the European Battery Alliance.

Europe’s largest battery producer

Northvolt aims to achieve a 25% share of the European battery market by 2030, corresponding to battery production of approximately 150 GWh per year. Crucial to this are the construction of two factories, Northvolt Ett in northern Sweden and Northvolt Zwei in Germany, which are expected to produce up to 40 GWh and 20 GWh annually, respectively. Northvolt Ett is expected to begin production as early as 2021 and is also set to use electricity exclusively from renewable sources. Northvolt Zwei is still in the permitting stage and is expected to be commissioned in 2024.

By the same year, the company also wants to use recycled batteries for half of its production materials. It is simultaneously testing technology for more efficient recycling in the Revolt project. A full-scale recycling line capable of processing up to 25,000 tonnes of batteries per year is expected to be built at the Northvolt Ett factory by 2022.

The European Investment Bank already provided Northvolt with a €53.5 million (CZK 1.3 billion) loan in 2018 for the construction of a demonstration plant. It began operating at the end of 2019. In July, Northvolt also signed a long-term battery supply agreement with carmaker BMW worth €2 billion (CZK 52.5 billion).

Featured photo: Northvolt Ett gigafactory. Source: Northvolt