Northvolt's plan to build a European battery gigafactory from the ground up accelerated in recent days as European Investment Bank (EIB) just approved the €350 million ($392 million) loan for the project.

"Northvolt has secured a 350 million euro loan from the European Investment bank (EIB), the lender’s largest ever direct financing of battery technology, as the Swedish startup raises funds to build Europe’s biggest battery plant."

Secured funds are part of broader €1.5 billion fundraising campaign (split equally between debt and equity) to build lithium-ion battery cell factory (32 GWh by 2023) in Skellefteå in Sweden.

Roughly half of the annual capacity (16 GWh) was already contracted - 80% by the automotive industry.

It seems that there is a lot of interest from the European industry (not only automotive) in the project, both in terms of purchasing batteries and participating in financing the project. The reason is the expected shortage of lithium-ion batteries and a kind of monopoly from Asian manufacturers.

Northvolt forecast 500-600 GWh of battery capacity to be needed annually by 2030 in Europe for electric cars.

"“The EIB’s approval is one really key piece of the puzzle in putting together that full funding,” co-founder Peter Carlsson, a former Tesla executive, told Reuters, adding that Northvolt expected to close the funding round before August.

Other potential debt and equity investors had viewed the EIB’s approval as a crucial indicator of the project’s viability, he added, given the due diligence the bank would have carried out before granting the loan."

Northvolt is, in fact, a new project without its own battery cell formula, which makes us wonder whether it is able to purchase a license for battery production or if it will try to develop its own during the first few years.

Northvolt is reportedly aiming for a similar chemistry to Tesla-Panasonic:

"Carlsson said the cells Northvolt is currently building are close to the low-cobalt NMC811 formula used by Tesla-supplier Panasonic.

“It is also fair to assume that the cobalt content will continue to fall and there will be efforts to further raise the nickel content to create even higher and richer energy densities,” he said."

Source: Reuters

Hide press release Show press release
Got a tip for us? Email: