Volkswagen and BMW have both invested in what will be Europe’s largest gigafactory for lithium-ion batteries.
Northvolt, the company behind the factory, revealed on Wednesday that it has raised $1 billion in equity capital to establish the battery facility in Skellefteå, Sweden, and also intends to build a second gigafactory in Lower Saxony, Germany.
“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,” co-founder and chief executive of Northvolt Peter Carlsson said.
Construction at the Swedish facility will start in August before large-scale battery production commences in 2021. The factory will initially have 16 GWh of lithium-ion battery cell manufacturing capacity. To put that into perspective, Tesla’s Gigafactory 1 had a capacity of approximately 20 GWh throughout 2018 and will grow in the coming years. Northvolt’s plant will be expanded to at least 32 GWh.
“Volkswagen is laying the groundwork at all levels for the successful implementation of its electrification strategy,” member of the Volkswagen AG Board of Management responsible for procurement, Dr. Stefan Sommer said. “With Northvolt, we have found a European partner whose know-how and sustainable, CO2 optimized battery cell production processes will enable us to advance cell production here in Germany. The prerequisite for this is, of course, the creation of the political framework.”
The aforementioned German gigafactory will come together thanks to a 50/50 joint venture between VW and Northvolt and will start making battery cells for the former from late 2023 or early 2024.