Swedish lithium-ion battery producer Northvolt has raised an additional $5 billion, firmly locking in its position as one of Europe’s best-funded startups and recipient of the largest-ever green loan from the EU. The company is adding that cash to its pot of $13 billion in equity and debt to expand operations across the world.
Northvolt is looking to build and expand battery plants across Sweden, Poland, Germany, the United States, and Canada. The $5 billion will be used to expand its first cell production site in Sweden currently under construction and expand its recycling plants. Group CEO Peter Carlsson described the deal as “an important step in Europe’s energy transition.”
The new loan comes from the backing of 23 commercial banks, as well as the European Investment Bank and the Nordic Investment Bank.
Northvolt recently locked in European approval for a €902 million ($986 million) subsidy from the German government to build its gigafactory there. The European Commission gave the new factory the stamp of approval, adding that it will boost the bloc’s clean energy future and help curb its dependency on China, according to a statement.
Northvolt is also building a plant in Quebec, on the south shore of Montreal, with the Quebec government contributing $2.9 billion and the federal government contributing $4.4 billion.
Northvolt’s order book is looking pretty full, too, with more than $55 billion from automakers including BMW, Volvo, Scania, and Volkswagen. The company is reportedly preparing for an initial public offering that could value it at more than $20 billion, Reuters reports.
China currently dominates the global battery market, with Europe accounting for a measly 3% of global cell production. So it’s pretty clear that Europe is putting a lot of faith in Northvolt – Europe’s biggest hope for a homegrown battery maker – to deliver the goods. And fast. The EU aims to catch up to China and hold 25% of the market by the end of this decade. For Northvolt’s part, it holds a ton of promise, and has said it said that it has made a lower-cost, more sustainable battery using sodium ion technology. Best part, the batteries don’t require lithium, nickel, graphite and cobalt, all minerals dominated by China.
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