Northvolt’s battery factory in northern Sweden in June.

North volt

Northvolt, a Swedish battery maker, has raised $ 2.75 billion from a number of big names to fuel its global expansion and increase production.

Headquartered in Stockholm, the company makes the lithium-ion batteries used to power electric cars, and claims it has signed $ 27 billion in contracts with companies like BMW and VW. The aim is to manufacture “the most environmentally friendly batteries in the world” using renewable energy sources and recycled raw materials.

The latest funding round, Northvolt’s largest to date, was led by Goldman Sachs and VW alongside new investors including Swedish pension funds AP1, AP2, AP3, AP4 and Canadian pension provider OMERS. Previous investors such as Spotify CEO Daniel Ek and the investment company Baillie Gifford are also investing in the round.

The total investment in the company now stands at $ 6.5 billion. The latest round of funding valued Northvolt at $ 11.75 billion, according to a person familiar with the company who asked to remain anonymous as Northvolt did not publicly disclose the number.

Northvolt was founded in 2016 and intends to use the financing to expand the capacity of its plant in the far north of Sweden from 40 gigawatt hours to 60 gigawatt hours, which is enough to supply batteries for around 1 million electric vehicles. Production is scheduled to start at the factory this year.

Northvolt co-founder and CEO Peter Carlsson told CNBC in an interview on Wednesday that the company is making “fairly significant shipments” from a smaller facility that has been in operation for over a year to customers who are now doing their own business. Validations. “

While none of the company’s batteries are in electric vehicles that are on the road today, they are used on test tracks, Carlsson said, adding that he expects Northvolt’s batteries to be delivered in vehicles from 2023 and in energy storage applications by the end of the next year.

VW, which placed a $ 14 billion contract with Northvolt earlier this year, announced Wednesday that it had invested $ 500 million ($ 609 million) of the $ 2.75 billion and that its 20% stake in the company remains unchanged.

“With this investment, we are strengthening our strategic partnership with Northvolt as a supplier of sustainable battery cells that are manufactured with renewable energies and are comprehensively recyclable,” said Arno Antlitz, Group Board Member for Finance and IT at VW.

Northvolt batteries are based on “a different chemistry” than Tesla’s and performance is becoming increasingly similar, said Carlsson, who was Tesla’s vice president of supply chain in Palo Alto between 2011 and 2015.

Making the batteries sustainable is one of Northvolt’s biggest challenges, he added. If the world switched to electric vehicles powered by batteries from coal-based economies like China, it would create a new carbon footprint the size of Spain, Carlsson said. “If we do this on the basis of renewable energy … we can prevent this from happening,” he said.

The company’s main plant is in Sweden and is considering building a second in Germany if enough renewable energy sources are available.

By 2030, the aim is to achieve 150 gigawatt hours of used annual production capacity in Europe.