With its demonstration concept a success, Sweden’s Northvolt aims to increase capacity to make electric car battery technology and move into a carbon-neutral future
Back in 2018, we asked Peter Carlsson, chief executive of Swedish battery innovator Northvolt, what he imagined Europe would look like in a decade or two. He told us he saw roads lined with cars and trucks that would no longer be burning fossil fuels.
Northvolt has taken a crucial step into that future by building one of the world’s most advanced battery factories. “Renewable energy storage is the key to a carbon-neutral society, and batteries are the key to getting there,” says Carlsson, a former executive at Tesla, the US electric car company.
As electric vehicle production rises rapidly, manufacturers in Europe and other parts of the world rely mostly on batteries imported from Asia, in places like South Korea, China or Japan. With an important collaboration deal with Volkswagen and BMW under its belt, Northvolt is confident that Europe is changing the current state of play.
Supported by a loan from the European Investment Bank with the backing of the European Union’s InnovFin programme, the company built a demonstration line of its concept in Västerås, not far from Stockholm. That factory started producing the new type of battery at the end of 2019.
But by then Northvolt was already looking much further ahead.
The next step is a lithium-ion battery factory in Skellefteå, northeast Sweden, which will employ up to 1,400 people and be a stepping stone to further battery production capacity of 32 gigawatt-hours by 2023. The company aims to ramp even that up to 40 gigawatt-hours in subsequent years.
The Skellefteå factory will be backed by another European Investment Bank loan, this time for $350 million, using the guarantee of the European Fund for Strategic Investments, part of the Investment Plan for Europe.
Joakim Palmgren and Jochen Hierl, part of the European Investment Bank project team for the financing of the first gigawatt-hours in Skellefteå, say Northvolt represents a big step forward in battery innovation and that the development of this project was dependent on the successful implementation of the demonstration line in Västerås .
Antonello Locci, a lead economist at the EU bank, says that “lowering the price of batteries and securing large-scale production in Europe with the use of renewable energy are essential factors for the automotive industry on the European continent, and the establishment of a new industry in Europe.”
Having been global head of Tesla’s supply chain, the idea for the new kind of battery factory came to Carlsson while he was looking for a new green venture that could use his supply-chain experience. He moved back home to Sweden in 2017 and got things rolling with a team of experienced partners with extensive track records in the automotive, battery and telecommunications industries.
The main reason for starting the venture in Sweden, apart from Carlsson being a Swede himself, was that:
- the country has essential raw materials needed for battery production, such as graphite and nickel
- it produces a lot of inexpensive hydroelectricity
- there are many modern ports in Sweden to export batteries across Europe and beyond.
Northvolt plans to improve battery energy efficiency, while making other advances in energy density and power in battery cells over the next 5 to 10 years.
“I’m trying to show Europe that carbon-free energy can be better stored and distributed with higher quality and lower costs and made more sustainable and truly available,” Carlsson says. “I want to inspire change and flick a switch for Europe.”
