Northvolt increases planned gigafactory capacity due to high demand

Battery maker Northvolt has said it is to expand the planned capacity for its gigafactory in Ett, Sweden due to heightened demand from auto firms as well as extra investment.

The Swedish company is now planning a 50% increase on the originally planned capacity - from 40GWh to 60GWh. This pushes up its total planned European capacity to 150GWh by 2030. Partial operations are scheduled to begin at the end of 2021. 

Northvolt is planning to construct an additional two European gigafactories to meet the 150GWh goal, one of which may be in Germany.

"We have been producing cells at our cell industrialisation facility, Northvolt Labs, for more than a year and are excited to now bring the knowledge and technology we have developed to the north and start large-scale production," said CEO Peter Carlsson.

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The company has already signed contracts worth €22.2 billion with automakers such as BMW and Volkswagen, the latter being a major shareholder in Northvolt.

Worldwide sales of electric vehicles rose by 151% year-on-year in the first quarter of this year and are expected to increase by 50% according to Macquarie.

This surge in demand will also drive higher demand for cobalt, nickel and lithium - essential components for EV batteries. 

"This is a new European industry in the making and it will require significant investments over the coming decade. It is encouraging to see that the investor community has identified the opportunity early, and we hope to see more investments throughout the value chain over the coming years," said Northvolt CFO  Alexander Hartman.

Read more: New EVs may face production delays from 2027 as lithium capacity lags

It is expected that Europe will add a further 331GWh of battery production capacity by 2025, with planned capacity continuing to rise as the continent plays catch-up with the well-established Asian battery industry.

Demand for battery cells in Europe is expected to grow to over 200GWh annually by 2025 and over 400GWh by 2030.

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