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Northvolt’s billion-dollar ‘milestone’ as it eyes German gigafactory

Wed, 06/16/2021 - 12:22 -- Paul Crompton
Northvolt’s billion-dollar ‘milestone’ as it eyes German gigafactory

Battery firm Northvolt has raised a further $2.75 billion in private placement to drive its lithium-ion production capacity and R&D efforts.

The latest round of funding brings Northvolt’s combined financing to more than $6.5 billion in equity and debt as it plans at least 150GWh of deployed annual production capacity in Europe by 2030.

In order to meet its 2030 capacity target, Northvolt anticipates building at least two more gigafactories in Europe, and is actively exploring the opportunity of building the next in Germany.

The latest private placement was co-led by new investors AP funds 1-4, via the co-owned company 4 to 1 Investments, and Canada’s defined benefit pension plan OMERS.

Existing investors included Goldman Sachs Asset Management and Volkswagen Group. 

Also participating in the equity raise were owners 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. 

Alexander Hartman, CFO of Northvolt said: “This is a new European industry in the making and it will require significant investments over the coming decade.”

Northvolt says it has secured more than $27 billion worth of contracts from customers, including: BMW, Fluence, Scania and Volkswagen.

Northvolt’s first gigafactory, Northvolt Ett, in Skellefteå, Sweden, is being expanded from 40GWh to 60GWh, and is due to begin production later this year.

 

Key Green milestone

The Northvolt plant is a key milestone in Europe’s industrial ramp up to achieve the European Green Deal objectives, according to EIT InnoEnergy.    

Diego Pavia, CEO of EIT InnoEnergy, welcomed Northvolt’s new finacing round.

He said: “Northvolt represents a cornerstone in Europe’s ambition to create an annual €250 billion battery value chain by 2025, as envisioned in 2017 when European Commission Vice President Šefčovič launched the European Battery Alliance and mandated EIT InnoEnergy to lead the industrial ecosystem. 

“It is also a leading example of how Europe can create new industrial value chains, which are at the core of growth, job creation and competitiveness.”

The European Battery Alliance brings together more than 600 industrial, financial and innovation actors with the objective to build a strong, sustainable and competitive European industrial battery value chain, from mining to recycling.

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