Battery manufacturer Northvolt raises $600M to invest in capacity expansion, R&D and giga-scale recycling; Volkswagen kicks in more
European battery maker Northvolt signed a $600-million private placement, led by Baillie Gifford, Goldman Sachs Merchant Banking Division and Volkswagen AG, enabling the company to make further investments in expanding its production and recycling capacity as well as R&D activities to support the target of establishing 150 GWh of manufacturing capacity in Europe by 2030.
In this private placement, a new group of international institutional investors join as Northvolt shareholders: Baillie Gifford, Baron Capital Group, Bridford Investments Limited, Norrsken VC & PCS Holding.
Private investors Cristina Stenbeck and Daniel Ek also participate in the equity raise together with existing Northvolt shareholders Goldman Sachs Merchant Banking Division, IMAS Foundation, Scania and Volkswagen AG.
We are in the middle of a race to establish manufacturing capacity in Europe, and I believe the companies that are best at attracting talent and capital, while scaling their blueprints the fastest, will be the most successful. With these world-class partners behind us, we have created a solid foundation to go on and execute our plans to enable large-scale manufacturing of green batteries in Europe.—Peter Carlsson, co-founder and CEO of Northvolt
The private placement will enable Northvolt to make further investments in three key areas:
Increasing production capacity of battery cells and systems to support the goal of establishing 150 GWh of manufacturing output in Europe by 2030.
Expanding the Northvolt Labs Campus, where the company’s R&D activities take place. Northvolt Labs is expected to double in size over the coming years in terms of investment and footprint.
Establishing a giga-scale lithium-ion battery recycling facility next to the Northvolt Ett gigafactory. The facility will become the largest in the world with an initial capacity of 4 GWh, and the only large-scale facility in Europe capable of recycling lithium in addition to cobalt, nickel, manganese and other metals.
Compared to traditional lithium-ion battery manufacturers, the Northvolt production process spans many portions of the value chain; Northvolt gigafactories are designed to achieve optimal scale benefits. This approach provides a structurally lower cost level and also allows for a high degree of cost and quality control.
The Northvolt Ett gigafactory in Skellefteå, Sweden, with a potential annual output of 40 GWh, is under construction and scheduled for start of production in 2021. Northvolt Ett will serve as Northvolt’s primary site for manufacturing of active material, cell assembly, recycling and auxiliaries.
In parallel, the permitting process is underway for Northvolt Zwei—run by the Northvolt–Volkswagen Group Joint Venture—in Salzgitter, Germany, which is scheduled to commence operations in 2024 with an initial output of 16 GWh. Northvolt Zwei takes its design from the Northvolt blueprint for battery manufacturing developed for Northvolt Ett.
Collectively, these initiatives will facilitate Northvolt’s target of a 25% market share in Europe by 2030, equaling approximately 150 GWh of commissioned annual production capacity, with 50% of its raw material coming from recycled batteries.
Goldman Sachs International and Morgan Stanley & Co. International plc act as financial advisors to Northvolt.
Among Northvolt’s industrial partners and customers are ABB, BMW Group, Scania, Siemens, Vattenfall, Vestas and the Volkswagen Group.