Northvolt has raised $2.75bn to expand capacity at its battery cell production Gigafactory and R&D plant in Sweden.
This ninth round of funding brings the total investment to $6.5bn and was led by long term pension fund investors for the first time, with existing investors and customers such as Volkswagen also looking for more battery cell manufacturing capacity.
The round was co-led by Swedish pension fund AP funds 1-4, and OMERS, one of Canada’s largest defined benefit pension plans, alongside existing investors Goldman Sachs Asset Management and Volkswagen Group.
The expansion will take capacity over 150 GWh a year by 2030. Northvolt already secured in excess of $27bn of contracts from key customers, including BMW, Fluence, Scania and Volkswagen. The plan also includes recycling capabilities to enable 50 percent of all its raw material requirements to be sourced from recycled batteries by 2030.
“We have a solid base of world-class investors and customers on-board who share Northvolt’s mission of building the world’s greenest battery to enable the European transition to renewable energy,” said Peter Carlsson, Co-Founder and CEO of Northvolt.
Northvolt’s first gigafactory, Northvolt Ett, in Skellefteå, Sweden, will be expanded from the earlier plan of 40 GWh to 60 GWh of annual production capacity in order to meet the increased demand from key customers, including a $14bn order from Volkswagen announced earlier this year. The factory will commence production later this year.
“We have been producing cells at our cell industrialization facility, Northvolt Labs, for more than a year and are excited to now bring the knowledge and technology we have developed to the north and start large-scale production,” said Carlsson.
In order to meet its 2030 capacity target, Northvolt currently anticipates building at least two more gigafactories in Europe over the coming decade, and is actively exploring the opportunity of building the next of these in Germany.
In the same timeframe, Northvolt is looking at other parts of the European supply chain for battery manufacturing, from processing of raw materials to component and equipment manufacturing, to production of battery cells and systems and the build-up of recycling infrastructure.
“This is a new European industry in the making and it will require significant investments over the coming decade. It is encouraging to see that the investor community has identified the opportunity early, and we hope to see more investments throughout the value chain over the coming years,” said Alexander Hartman, CFO of Northvolt.
Also participating in the equity raise are current investors AMF, ATP, Baillie Gifford, Baron Capital Group, Bridford Investments Limited, Compagnia di San Paolo through Fondaco Growth, Cristina Stenbeck, Daniel Ek, IMAS Foundation, EIT InnoEnergy, Norrsken VC, PCS Holding, Scania and Stena Metall Finans.
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