Northvolt
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Swedish company Northvolt raises $2.75B to accelerate European battery production
Swedish battery developer and manufacturer Northvolt AB has raised $2.75 billion in capital as it prepares to ramp up to an annual production capacity of 150 GWh in Europe by 2030.
The funding round — Northvolt’s largest thus far — was co-led by existing investors Goldman Sachs and Volkswagen, and new investors including the Swedish pension funds AP1-4 and OMERS, one of Canada’s largest pension plans. 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 also participated in the raise.
Volkswagen’s investment came to €500 million ($620 million), the OEM said Wednesday, maintaining its 20% stake in the battery manufacturer.
CNBC reported that Northvolt’s valuation now stands at $11.75 billion. The company declined to comment on the specific valuation figure to TechCrunch.
Northvolt has already scored major deals with automakers like Volkswagen and BMW. In July 2020, the company inked a $2.3 billion contract with BMW for batteries; more recently, in March, Volkswagen put in a $14 billion order over a 10-year period. The two deals bring Northvolt’s total contracts to $27 billion. Other notable customers include Swedish heavy-duty truck manufacturer Scania and energy storage company Fluence.
This brings Northvolt’s total raised to more than $6.5 billion since the company was founded in 2016. The manufacturer’s first gigafactory in Skellefteå, Sweden, will be expanded from 40 GWh to 60 GWh, in part due to increased demand from the Volkswagen order, the company said in a statement. That facility will commence production later in 2021.
Northvolt’s overarching plan is to ramp up to at least 150 GWh of annual battery production across Europe by 2030. To meet this massive target, the company is considering at least two additional gigafactories, including one in Germany.
Northvolt is one of Europe’s largest battery manufacturers. Company shareholder EIT InnoEnergy said in a statement Wednesday that the funding is key to Europe achieving its Green Deal objectives, which includes creating a European battery value chain.
The Swedish company aims to distinguish itself from other battery manufacturers by producing batteries using renewable energy for the manufacturing process. Northvolt says its batteries have an 80% lower carbon footprint than those made with coal power. It also recycles batteries in-house and reuses the raw materials in its production process.
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Swedish battery manufacturer Northvolt receives a $14 billion order from VW
Northvolt, the Swedish battery manufacturer which raised $1 billion in financing from investors led by Goldman Sachs and Volkswagen back in 2019, has signed a massive $14 billion battery order with VW for the next 10 years.
The big buy clears up some questions about where Volkswagen will be getting the batteries for its huge push into electric vehicles, which will see the automaker reach production capacity of 1.5 million electric vehicles by 2025.
The deal will not only see Northvolt become the strategic lead supplier for battery cells for Volkswagen Group in Europe, but will also involve the German automaker increasing its equity ownership of Northvolt.
As part of the partnership agreement, Northvolt’s gigafactory in Sweden will be expanded and Northvolt agreed to sell its joint venture share in its Salzgitter, Germany factory to Volkswagen as the car maker looks to build up its battery manufacturing efforts across Europe, the companies said.
The agreement between Northvolt and VW brings the Swedish battery maker’s total contracts to $27 billion in the two years since it raised its big $1 billion cash haul.
“Volkswagen is a key investor, customer and partner on the journey ahead and we will continue to work hard with the goal of providing them with the greenest battery on the planet as they rapidly expand their fleet of electric vehicles,” said Peter Carlsson, the co-founder and chief executive of Northvolt, in a statement.
Northvolt’s other partners and customers include ABB, BMW Group, Scania, Siemens, Vattenfall and Vestas. Together these firms comprise some of the largest manufacturers in Europe.
Back in 2019, the company said that its cell manufacturing capacity could hit 16 gigawatt hours and that it had sold its capacity to the tune of $13 billion through 2030. That means that the Volkswagen deal will eat up a significant portion of expanded product lines.
Founded by Carlsson, a former executive at Tesla, Northvolt’s battery business was intended to leapfrog the European Union into direct competition with Asia’s largest battery manufacturers — Samsung, LG Chem and CATL.
Back when the company first announced its $1 billion investment round, Carlsson had said that Northvolt would need to build up to150 gigawatt hours of capacity to hit targets for 2030 electric vehicle sales.
The plant in Sweden is expected to hit at least 32 gigawatt hours of production, thanks in part to backing by the Swedish pension fund firms AMF and Folksam and Ikea-linked IMAS Foundation, in addition to the big financial partners Volkswagen and Goldman Sachs.
Northvolt has had a busy few months. Earlier in March the company announced the acquisition of the Silicon Valley-based startup company Cuberg.
That acquisition gave Northvolt a foothold in the U.S. and established the company’s advanced technology center.
The acquisition also gives Northvolt a window into the newest battery chemistry that’s being touted as a savior for the industry — lithium metal batteries.
Cuberg spun out of Stanford University back in 2015 to commercialize what the company called its next-generation battery, combining a liquid electrolyte with a lithium metal anode. The company’s customers include Boeing, BETA Technologies, Ampaire and VoltAero, and it was backed by Boeing HorizonX Ventures, Activate.org, the California Energy Commission, the Department of Energy and the TomKat Center at Stanford.
Cuberg’s cells deliver 70% increased range and capacity versus comparable lithium ion cells designed for electric aviation applications. The two companies hope they can apply the technology to Northvolt’s automotive and industrial product portfolio with the ambition to industrialize cells in 2025 that exceed 1,000 Wh/L, while meeting the full spectrum of automotive customer requirements, according to a statement.
“The Cuberg team has shown exceptional ability to develop world-class technology, proven results and an outstanding customer base in a lean and efficient organization,” said Peter Carlsson, CEO and co-founder, Northvolt in a statement. “Combining these strengths with the capabilities and technology of Northvolt allows us to make significant improvements in both performance and safety while driving down cost even further for next-generation battery cells. This is critical for accelerating the shift to fully electric vehicles and responding to the needs of the leading automotive companies within a relevant time frame.”
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