Volkswagen Leads €886 Million Investment in Northvolt

Car manufacturer Volkswagen has led an eye-watering €886 million investment in Swedish startup Northvolt – a supplier of sustainable battery cells and systems. The funding will go towards building Europe’s first gigafactory for lithium-ion battery cells. The factory, named Northvolt Ett, will be in Skellefteå, Sweden. Goldman Sachs was also a lead investor in the funding round, which also saw participation from the BMW Group, AMF, Folksam Group and IMAS Foundation.

The financing comes just a month after securing a €350 million loan from the European Investment Bank for the project. It is also the largest equity round in a European startup since Softbank’s investment in the Swiss biotech Roivant Sciences in 2017.

Northvolt Leading the Change

Northvolt is a European supplier of sustainable, high-quality battery cells and systems. The Stockholm-based startup was founded in 2016 and is driving the European transition to a decarbonised future. Since its inception, the company has focused on delivering the world’s greenest lithium-ion battery with a minimal CO2 footprint and the highest ambitions for recycling.

Northvolt’s lithium-ion battery systems range from small to large – enough to power a car, a house, or entire grids – and use data to track customer field usage patterns and to continuously improve design, performance, manufacturing, and more.

Gigafactories in Sweden and Germany

Construction work on the Northvolt Ett gigafactory will begin in August, and large-scale production of the 16 GWh lithium-ion battery cell is in the pipeline for 2021.

Northvolt Ett will serve as Northvolt’s primary production site, hosting active material preparation, cell assembly, and recycling. The gigafactory will be expanded to produce at least 32 GWh worth of energy annually.

Volkswagen and Northvolt also plan to set up a 16 GWh battery cell factory in Salzgitter, Lower Saxony, Germany. The production facility should start manufacturing battery cells for Volkswagen from late 2023 or early 2024 and could increase to 24 GWh over the following years.

“Today is not only a great milestone for Northvolt, it also marks a key moment for Europe that clearly shows that we are ready to compete in the coming wave of electrification, and that we will do so using battery cells which carry the lowest CO2 footprint possible,” said Peter Carlsson, Co-founder and CEO of Northvolt.

“With these world-class financial and industrial partners coming together and getting behind our mission, we see a tremendous opportunity and momentum for further capacity expansion and product innovation over the coming years. This is only the beginning,” said Carlsson.

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