Northvolt, a Swedish battery manufacturer whose customers include BMW and Volkswagen, has signed a $1.1 billion convertible note as battery demand for electric vehicles is on the rise. The round saw participation from AMF, AP funds 1-4 (via the co-owned company 4 to 1 Investments), ATP, Ava Investors, Baillie Gifford, Compagnia di San Paolo through Fondaco Growth, Folksam Group, Goldman Sachs Asset Management, IMAS Foundation, Olympia Group, OMERS Capital Markets, PCS Holding, Swedbank Robur, TM Capital and Volkswagen Group.
Expansion of production in Europe
Northvolt will use the investment to finance its expansion of battery cell and cathode material production in Europe to support the rapidly expanding demand for batteries. With this capital raise, the total investment secured by the battery maker since 2017 is close to $8 billion in equity and debt to deliver. It will help the company deliver on its plans to establish a supply of sustainable batteries to enable the decarbonisation of society.
Peter Carlsson, Co-Founder and CEO of Northvolt, commented: “We are proud and thankful for the support and trust from these world-class investors and partners. We will continue to work hard to deliver on the promise we have made to them to build the world’s greenest battery. The combination of political decision making, customers committing even more firmly to the transition to electric vehicles, and a very rapid rise in consumer demand for cleaner products, has created a perfect storm for electrification.”
Europe’s largest battery cell factory by 2024
Founded in 2016 in Stockholm, Peter Carlsson and Paolo Cerruti, Northvolt is on a mission to develop the world’s greenest battery cell and establish a European supply of batteries to enable the future of energy. For those who are not aware, Carlsson left his position as CPO and Head of Supply Chain at Tesla Motors in 2015 to become an entrepreneur, advisor and angel investor.
Further, the company is developing manufacturing capacity to deliver on $55 billion in orders from key customers, including BMW, Fluence, Scania, Volvo Cars, and Volkswagen Group. Its key strategy involves establishing in-house competences and presence throughout the battery value chain, including cathode material production and recycling. Through its large-scale recycling program, Northvolt intends to enable 50% of its raw material requirements to be sourced from recycled batteries by 2030.
Recently, Northvolt commenced commercial deliveries to European automotive customers from its first battery gigafactory, Northvolt Ett. The company produced its first battery cell at the Northvolt Ett gigafactory in Skellefteå, Sweden, just before New Year’s Eve 2021 and made the first commercial deliveries from the factory during the spring of 2022.
Key projects of the company include the continuous ramp up and expansion of Northvolt Ett, as well as the establishment of the Northvolt Volvo Cars joint venture gigafactory in Gothenburg, Sweden, and its third gigafactory, Northvolt Drei, in Heide, Germany. In parallel, a cathode factory, Northvolt Fem, is being established in Borlänge, Sweden.