Two former Tesla workers are set to beat their former employee in making lithium-ion cells for electric vehicle and energy storage applications in Europe.
Northvolt AB’s ambitious plans to build Europe's first Gigafactory in Sweden were given a boost when investment firm InnoEnergy, announced a €3.5million (around 35MSEK or $3.7million) investment.
The investment is a step toward Northvolt being able to develop the facility that would have a final production capacity of 32GWh, similar to that of Tesla’s US gigafactory, by 2023.
The company aims to breakground at the site in the second half of 2018 with the aim of manufacturing its first cells in 2020, then increase production by 8GW each year thereafter for three years.
Former supply chain head for Tesla, Peter Carlsson founded the company, previously known as SGF Energy. He is looking to raise around €4billion ($4.2billion) for the project.
The company also boasts former Tesla executive Paolo Cerruti as its chief operating officer.
Cerruti told BBB just before boarding a plane for California: “The battery industry is Asia centric. Firstly in Japan, then Korea and now China is growing. Fundamentally if Europe wants energy independence and ownership, to control its destiny which was reliant in the last century on the Middle east and Russia, it must have facilities like a Gigafactory.
“It’s not only us that’s thinking this is going to be a big market, take VolksWagon which has said it wants 25% of its fleet powered by electricity by 2025, which is extremely bold.
“But if you take only 10% and see that across the whole production of vehicles across Europe by 2025 that’s in excess of 100GW in Europe. Currently it is between 0-2GW.”
Curruti told BBB Northvolt had had ‘very concrete’ conversations with two ‘very large players’ in the industry, but it was too early to talk names.
Responding to the obvious Tesla links, he said: “We are not necessarily going to use the same model as Tesla where Panasonic invests, we are in the model where we will invest capital and define technology partnerships afterward.
He added: “It’s really important not to see us in competition with Tesla, rather we are working toward the same purpose of de-carbonisation.”
Northvolt will use InnoEnergy’s cash to complete technology partnerships, business development, supply chain, factory and process design, site selection and environmental and recycling plans.
Bo Normark, thematic leader for smart grids and electric storage, InnoEnergy, told BBB: “Batteries and storage are identified as key enabling technologies for the transformation of both the electric energy and transportation sectors toward zero emissions.
“Demand for batteries is increasing rapidly. Several recent studies suggest that the market for batteries in the transportation sector, as well as for the market for stationary batteries is growing faster than in previous estimations.
“Production of batteries is currently focused in Asia and US and is largely based on mineral supplies outside Europe. Batteries represent a strategic resource and studies suggests that a European industry can be established that is both cost efficient and increasingly using mineral resources in the continent.
Northvolt chose Sweden because of its access to necessary materials and metals, availability of affordable and fossil free power supply and its modern infrastructure, said the firm.
The latest development would add to Europe’s blossoming battery manufacturing industry, which includes Korean firm LG Chem building a 100,000 battery a year plant in Poland.
And Battery maker Samsung SDI building a lithium-ion plant in Hungary to supply the European electric vehicle market.
The photo is Peter Carlsson, the CEO at Northvolt.