Northvolt receives a $350m loan from the European Investment Bank (EIB). The loan is intended to finance Europe's first gigafactory for lithium-ion batteries. The plant is called Northvolt Ett and will be built in Sweden.
Northvolt is a company founded in 2016 by Peter Carlsson, a former manager of electric vehicle manufacturer Tesla. The batteries Northvolt develops are not only aimed at the automotive sector, but also at other applications. These include power grids and industrial applications.
The company aims to transform lithium-ion battery manufacturing by focusing on a combination of scale, vertical integration and automated production. With this combination, the company aims to push the boundaries of battery performance, quality and cost.
Demonstration plant
The financing made available by the EIB is part of the European Fund for Strategic Investments (EFSI). This fund is one of the pillars of the Investment Plan for Europe. In 2018, the EIB also supported a Northvolt demonstration plant in Västerås, 100 kilometres west of Sweden's capital Stockholm. Production at this demonstration plant started in late 2019. The plant has a production capacity of 350 MWh per year.
So now follows Northvolt Ett, which is being built in Skellefteå in northern Sweden. This location was chosen in view of the wide availability of raw materials and renewable energy sources. Northvolt aims to run its production processes 100% on renewable energy sources. The company also sets itself the goal of producing every new battery cell from at least 50% recycled material by 2030.
Up to 40 GWh per year
Swedish plant will be Northvolt's primary production site. Thus, the site will be used for preparing active materials, assembling battery cells, recycling and developing additional systems and solutions. The plant should be operational from 2021. The plant's production capacity will be 16 GWh of battery capacity per year in the first phase. By 2024, production capacity should be increased to 32 GWh per year, after which it can be further scaled up to 40 GWh.
"The EIB and the Commission (ed: European Commission) are strategic partners in the EU Battery Alliance and are working closely with both industry and Member States to put Europe firmly on the path towards global leadership in this strategic sector. Northvolt is one of our frontrunners and is poised to build Europe's first self-developed gigafactory for lithium-ion battery cells with a minimal carbon footprint. By supporting this state-of-the-art project, we confirm our commitment to strengthening Europe's resilience and strategic autonomy in key sectors and technologies," said Maroš Šefčovič, Vice-President of the European Commission and responsible for the European Battery Alliance.
Increasing strategic autonomy
Andrew McDowell, vice-president of the EIB, added: "Since the creation of the European Battery Alliance in 2018, the EIB has strengthened its support for the battery value chain to build Europe's strategic autonomy in a technology critical to its competitiveness and sustainable future. I see the EIB's financial support for Northvolt as a good example of how our financial and technical due diligence helps attract private investors to visionary projects."
Carlsson: "The EIB has played a critical role in making this project possible from the beginning. We are enormously grateful for the support we have received from them and the European Union. Europe needs to develop its own supply chain for large-scale battery production. The EIB is a cornerstone in this process."
Northvolt Zwei
Northvolt Ett is not the only plant Northvolt is building, by the way. In a joint venture with Volkswagen called the Northvolt-Volkswagen Group Joint Venture, a battery plant is also being built in Salzgitter in Lower Saxony, Germany. This plant is called Northvolt Zwei and is based on the design of Northvolt Ett. Construction of Northvolt Zwei is scheduled for 2021, with production to start in early 2024. The initial production capacity of this German plant is 20 GWh.
Besides Volkswagen, BMW Group is also working with Northvolt. The German carmaker signed a long-term agreement earlier this year to buy battery cells from Northvolt. It is a contract worth 2 billion euros for the production of battery cells at Northvolt Ett. The battery cells for BMW will be produced from 2024.
Author: Wouter Hoeffnagel
