Northvolt financing stands: Former Tesla managers build Europe’s first cell gigafactory

Near the former gold mining town of Skelleftea in Sweden, Northvolt, founded by two former Tesla managers, is working on Europe’s first and largest factory for the production of battery cells for electric cars. As for the European Gigafactory at Tesla near Berlin, many trees were cleared there to make room for the huge new facility, and construction has already started. And the financing is now complete, Northvolt said on Wednesday: Partly public loans of $ 1.6 billion are to flow to the cell factory in Sweden and another in Germany, together with about the same amount of equity.

Giga capacity like Tesla

With a capacity of up to 40 gigawatt hours per year, Northvolt Ett (One) is to become the largest cell factory in Europe, which, together with the USA, has so far left this field almost entirely to Asian countries and manufacturers. According to the plans from 2021 onwards, it would produce approximately as many cells as Tesla’s Gigafactory currently does together with Panasonic in Nevada. Northvolt Zwei, a joint venture with the Volkswagen Group in Salzgitter in Germany with up to 20 gigawatt hours per year, is to be added from 2024.

According to Northvolt, the current loan financing comes from a consortium of private banks, pension funds and public institutions. The European Investment Bank contributed $ 350 million, according to an EU statement. The factory in Sweden is described as Europe’s first gigafactory. In the first phase, their annual capacity would reach 16 gigawatt hours of battery cells and later “potentially” 40 gigawatt hours. They are intended for electric cars, stationary large storage facilities as well as industrial and portable applications.

Founder of two former Tesla managers

Northvolt was founded by Peter Carlsson and Paolo Cerruti, today the company’s CEO and COO, both of whom previously worked at Tesla. When they started in 2016, there was hardly any talk of electric cars and especially battery cells for them in Europe – for this reason, the project seemed to some to be as hopeless as Tesla’s plans. But Tesla developed very well. And Northvolt was also able to announce the entry of Volkswagen and Goldman Sachs and BMW in 2019 with huge equity financing of $ 1 billion.

In September 2019, Northvolt and Volkswagen also founded a joint venture for the cell factory in Germany, into which part of the VW investment totaling EUR 900 million was directed. According to the information given at the time in the Swedish battery startup of the former Tesla managers, the German group had a share of approximately 20 percent and a seat on its supervisory board.


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