Northvolt, a Sweden-based manufacturer of lithium-ion batteries, has signed a $1.1 billion convertible note to finance the expansion of its battery and cathode material production in Europe.

In the past five years, Northvolt has secured nearly $8 billion in equity and debt to further its plans to establish a sustainable battery supply.

The lithium-ion battery manufacturer has a strong customer base, including global automotive conglomerates like BMW, Fluence, Scania, Volvo Cars, and Volkswagen Group. Northvolt aims to deliver on orders procured from its key customers, amounting to $55 billion, by developing a manufacturing capacity.

Investors participating in the fund-raising round were AMF, AP funds 1-4 via the co-owned company 4 to 1 Investments, ATP, Ava Investors, Baillie Gifford,  Compagnia di San Paolo through Fondaco Growth, Folksam Group, Goldman Sachs Asset Management, IMAS Foundation, Olympia Group, OMERS Capital Markets, PCS Holding, Swedbank Robur, TM Capital, and Volkswagen Group.

Co-founder and CEO of Northvolt Peter Carlsson said, “The combination of political decision making, a firm commitment from customers to the transition to electric vehicles, and a very rapid rise in consumer demand for cleaner products has created a perfect storm for electrification. We will continue to work hard to deliver on the promise we have made to them to build the world’s greenest battery.”

The company made the first commercial deliveries of its battery cell in the spring of 2022. The battery cells were produced at the Northvolt Ett gigafactory in Skellefteå, Sweden.

Northvolt maintains a large-scale recycling program to enable 50% of its raw material requirements to be sourced from recycled batteries by 2030. The company promotes in-house competencies throughout the battery value chain, including cathode material production and recycling.

The company’s key projects include ramping up and expanding the Northvolt Ett Gigafactory, while it targets the establishment of the Northvolt Volvo Cars joint venture gigafactory in Gothenburg, Sweden. The manufacturer is also planning to set up its third Gigafactoryin Heide, Germany, while it aims to establish Northvolt Fem, a cathode factory, in Borlänge, Sweden.

According to Mercom’s Q1 2022 Funding and M&A Report for Storage, Grid, and Efficiency, the corporate funding for battery storage, smart grid, and energy efficiency companies globally stood at $13.3 billion, which is a 166% year-over-year spike from $5 billion raised in the first quarter of the previous financial year.