Image source: Northvolt
Swedish battery start-up, Northvolt has confirmed that it has raised €350-million from the European Investment Bank and is awaiting further funding from Ikea. Founded by two former Tesla executives, Northvolt seeks to raise €1.5-billion to build a battery production facility in the north of Sweden, close to the Arctic Circle.
At the forefront of Europe's drive to create a battery industry of its own to rival that of China and South Korea, Northvolt is attempting to create a market to meet the burgeoning demand in Europe for electric vehicles and storage systems.
At present nearly all the world's batteries are made by a small number of countries in Asia who have already received huge orders for future battery supplies from carmakers all over the globe.
Earlier this week, Volvo announced it had signed a deal with South Korea's LG Chem and China's CATL to supply batteries.
The remainder of the €1.5-billion for the battery factory, Northvolt said, will come from debt and equity. The fundraising will help build phase one of the Skellefteå battery plant which is set to produce 16 Gwh of batteries annually. The aim is to reach 32 Gwh at full capacity.
The amount that is to be invested by Ikea has yet to be agreed upon but, providing the talks do not fall through, the Swedish furniture giant would join an array of European industrial groups, including BMW, ABB, Scania and Vestas, who have backed Northvolt.
Investing in Northvolt would fit well with Ikea's aims of producing as much renewable energy of its own as it uses in day to day operations.
Northvolt has said it plans to make battery cells in Stockholm, which will then be assembled into batteries at the Skellefteå factory in the north. There are also plans to build another factory in Poland to build lithium-ion batteries into battery modules.
Northvolt faces strong competition from the battery giants of Asia who are setting up European factories. LG Chem is constructing a plant in Poland and CATL said they are to build a factory in Germany.
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