A mission to produce the world’s greenest battery cells
Elon Musk’s two former colleagues realized how the huge lack of battery production capacity for electric cars could possibly create geo-political problems. Now they’ve just completed a $1 billion equity capital raise from the likes of Volkswagen Group, Goldman Sachs, BMW Group and IKEA’s IMAS Foundation to enable Northvolt to build Europe’s first homegrown giga-factories for lithium-ion batteries.
In March this year, Norway set a new world-record when 58% of the newly registered cars were electric, and their ambition is that in 2025, 100% of the new vehicles will be with zero emissions. And though it’s estimated that as early as 2022, the electric cars will be cheaper than petrol driven, we’re still facing the battery issue.
In California a couple of years ago, Peter Carlsson and Paolo Cerruti were both working in the supply chain for Tesla’s Model S. They realized that while Asia were having a good supply with batteries for electric vehicles, Europe had — none.
— When they started to investigate the potential they quickly realized that the Nordic region was a great choice to build one of Europe’s first gigafactories, says Jesper Wigardt, Head of Corporate Communications & Public Affairs at Northvolt. He explains:
— It takes a tremendous amount of energy to produce battery cells, so it really matters which kind of energy grid you put your factory in. If your energy comes from coal you will build in a significant amount of CO2 in your batteries. The Nordics and Sweden, on the other hand, produce a lot of energy. And it’s cheap and produced with minimal CO2. So in order to be able to create green batteries they chose to come to Sweden.
Starting with a handful of employees, they’re now 300 from 45 different nationalities.
— A large part of our cell design team are from Japan and Korea. Without any large-scale European battery production, it of course affects the recruitment side where it’s harder to find the right specialised skills in Europe.
Northvolt are currently finalizing their 19000sqm ”mini-factory” Northvolt Labs in Västerås, Sweden, including a demonstration line and R&D facility, and the reason to build it, Wigardt explains, are several:
— To optimize our routines and train our staff and provide an industrialization platform for customers, where they can take their ideas concerning cell design and we can enable the production of millions of them. It’s our first step before large-scale production, he says.
Northvolt Labs will open later during 2019. Construction of the main factory in Skellefteå, Sweden, where ground preparations are close to completion, will start in August.
— It’s a massive site, as big as 70 soccer fields, and equal in size as The Old Town in Stockholm, says Wigardt. The financing process for the first part of the factory has just ended with a couple of financial investors, such as Goldman Sachs, and industrial investors, like BMW plus Volkswagen, joining the mission. We will also build another battery factory in Germany together with VW.
— We have a mission to produce the world’s greenest battery cells to enable the European transition to renewable energy, to minimize the CO2 and with high ambitions to recycle batteries. Our ambition is that the final factory will consist of four smaller facilities with a capacity of 8 gigawatt-hours each. We now have an environmental permit for two of them, making our total capacity 16 gigawatt-hours.
That’s equivalent to batteries for 200-300 000 cars, but with a current $13 billion(!) order book (meaning that the production is sold out from 2022 and five years onwards), founder Peter Carlsson hopes to reach 32 gigawatt-hours in 2024.
The facility is estimated to create 2 500 new jobs and except for the automotive industry with cars, trucks, and buses, it will provide batteries for portable tools, such as lawn mowers, grids (battery storage for windmills and solar panels) and industrial companies, including Swedish Epiroc’s underground mining machines.
— We’re extremely humble that this will require a lot of hard work. But we also see a huge potential and it’s amazing to reflect on where we were just one year ago and how the world has developed since. I feel great optimism, says Wigardt.Volkswagen GroupGoldman SachsIKEABMW