Volvo-backed EV Battery Maker Northvolt, Founded by Former Tesla Execs, Raises Another $1.1 Billion to Help Fund its Expansion

author: Eric Walz   

Sweden-based electric vehicle battery manufacturer Northvolt, a company backed by automaker Volvo Cars, today announced the signing of a $1.1 billion convertible note to fund its expansion of battery cell and cathode material production in Europe to meet the growing demand for EV batteries from automakers.

With the latest capital raise, Northvolt has secured close to $8 billion in equity and debt since 2017 to supply sustainable EV batteries to the auto industry that's quickly transitioning towards electrification.

"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," said co-founder and Northvolt CEO, Peter Carlsson.

Investors in the $1.1 billion convertible note include Volkswagen Group, Goldman Sachs Asset Management, AMF, Baillie Gifford and others.

Northvolt's automotive customers include Volvo Cars, Polestar, BMW and Volkswagen Group. The company is currently developing manufacturing capacity to deliver on over $55 billion in battery orders.

Northvolt aims to make the manufacturing of EV batteries more sustainable throughout the battery value chain, including the production of cathode materials and recycling. The company is targeting 50% of its raw materials be sourced from recycled batteries by 2030.

"We are proud and thankful for the support and trust from these world-class investors and partners," said Carlsson. "We will continue to work hard to deliver on the promise we have made to them to build the world's greenest battery."

In February, Volvo Cars and Northvolt announced plans to establish a new joint venture battery manufacturing plant in Gothenburg, Sweden which will start producing batteries in 2025. The plant will be one of the largest EV battery cell factories in Europe. It will have an annual cell production capacity of up to 50 gigawatt hours (GWh), which is enough batteries to supply roughly half a million cars per year, according to Northvolt. 

Northvolt appointed former Tesla executive Adrian Clarke to lead battery production for the new joint venture.

The factory will create up to 3,000 jobs and complement the planned R&D center that both companies announced in Dec 2021 as part of an earlier investment of approximately SEK 30 billion (US$3.2 billion) from Volvo Cars.

The location of the plant in Torslanda, Gothenburg was specifically chosen since it offers a direct supply route into Volvo Cars' largest automotive factory in Sweden, as well as its proximity to both Volvo Cars' and Northvolt's R&D centers.

The Northvolt factory is also located near Sweden's primary nickel, cobalt, lithium and graphite deposits, which are the raw materials needed for battery production.

Northvolt was co-founded in 2016 as "SGF Energy" by former Tesla executives Peter Carlsson and Paolo Cerruti. In 2017, the company officially changed its name to Northvolt with Carlsson serving as CEO.

The company's goal is to deliver the world's greenest lithium-ion battery and establish a sustainable supply of EV batteries "to enable the decarbonization of society." 

Carlsson was Global Head of Sourcing & Supply Chain at Tesla from 2011 to 2015 and worked alongside Tesla Chief Executive Elon Musk for over four years. He also helped launch the Model S and managed Tesla's supply chain, which included over 300 individual suppliers at the time. 

Cerruti joined Northvolt in 2016 after serving as VP of Global Supply Chain & Operations Planning at Tesla from March 2012 to Feb 2016. He currently serves as Northvolt's Chief Operating Officer.

Other NorthVolt projects include ramping up and expansion of its gigafactory in Sweden and building a third battery cell gigafactory in Heide, Germany, as well as a cathode factory in Borlänge, Sweden.

Northvolt produced the first battery cells at the Northvolt Ett gigafactory in Skellefteå, Sweden in Dec 2021. The first commercial deliveries from the factory began in the spring.

In February, Northvolt and Finnish company Stora Enso, a leading provider of renewable paper products, signed a letter of intent to purchase a former paper mill on the outskirts of Borlange. Northvolt is currently developing the Kvarnsveden Mill site, which is still owned by Stora Enso, into a manufacturing plant for active cathode material and battery cell production. 

The gigafactory is expected to start the first part of its operations in late 2024 and will employ up to 1,000 workers. Northvolt says the plant will utilize 100% clean energy from the region. The factory includes a direct rail link to Gothenburg harbor.  

Once renovations at the site are complete, it will have a potential annual production capacity of more than 100 GWh of cathode material, which will support EV battery cell production at Northvolt's multiple facilities.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.