Swedish company NorthVolt, which was co-founded by an ex-Tesla executive, has outlined plans to build Europe’s largest battery factory. The project would rival Tesla’s Gigafactory which is based in the Nevada Desert. It would also enable European businesses to move away from Asian battery companies which currently dominate lithium ion battery manufacture for electric cars.
The facility will produce 8 gigawatt hours of batteries per year initially when manufacture begins in 2020. This will rise to 32 gigawatt hours when it is fully operational by 2023. Location is yet to be decided, but a shortlist of possible sites is set to be released in a month. The front runners so far are Sweden and Finland, which would enable the factory to run on renewable energy.
A solid business plan
To meet emission reduction targets set by the Paris Climate Agreement, vehicle efficiency needs to double in the next 5 years. Manufacturers are therefore, turning to battery powered versions of their cars – Volkswagen plans to have 30 different electric car models by 2025. Electrification and battery storage is the key to becoming a zero-carbon economy. Batteries help to plug the gaps from intermittent renewables like solar and wind. Paolo Cerruti, the chief operating officer and another former Tesla executive stated, “The project resonates commercially, since the demand from automotive and energy storage sectors will be huge.”
But co-founder Peter Carlsson sees openings in energy storage and heavy industry too – not just automotive. He said, “We have a solid business plan in place that enables us to produce high quality batteries at an affordable cost.” He aims to supply local manufacturers rather than his previous employer Tesla. If nothing was done, then Europe would be “completely dependent on an Asian supply chain” he told the Financial Times. This is what he hopes to prevent with the gigafactory project which is planned to begin construction in late 2018.
The project needs a €4 billion investment to come to fruition. Currently funding agreements are in place with Stena, Vattenfall, InnoEnergy, the Swedish Energy Agency and Vinnova. Plus, NorthVolt will be applying for a loan from the European Investment Bank. However, Carlsson admits that raising the required funds whilst still maintaining a meaningful stake will be a challenge. But he is clear on one thing, “it is hugely important to accelerate society away from its fossil fuel addiction”.