Sweden-based lithium-ion battery manufacturer Northvolt has signed a $2.75 billion private placement to finance its battery cell production expansion and research and development (R&D) efforts.
The annual production capacity of Northvolt’s first gigafactory, Northvolt Ett, in Skellefteå, Sweden, will be expanded from the earlier planned 40 GWh to 60 GWh to meet the increased demand from key customers. It includes a $14 billion order from Volkswagen announced earlier this year. The factory will commence production later this year. The company has been helping the decarbonization and emobility programs of its customers.
The private placement was co-led by new investors – Swedish pension funds AP1, AP2, AP3, AP4 – via the co-owned company, 4 to 1 Investments, and OMERS, one of Canada’s largest defined benefit pension plans, alongside existing investors Goldman Sachs Asset Management and Volkswagen Group.
Goldman Sachs Bank Europe SE and Morgan Stanley & Co. International PLC were the financial advisors to Northvolt.
Current owners AMF, ATP, Baillie Gifford, Baron Capital Group, Bridford Investments Limited, Compagnia di San Paolo through Fondaco Growth, Cristina Stenbeck, Daniel Ek, IMAS Foundation, EIT InnoEnergy, Norrsken VC, PCS Holding, Scania, and Stena Metall Finans, also participated in the equity raise.
Northvolt has now raised more than $6.5 billion in equity and debt – including this private placement – and plans to expand up to and beyond 150 GWh of deployed annual production capacity in Europe by 2030.
In addition, Northvolt has to date secured over $27 billion worth of contracts from key customers, including BMW, Fluence, Scania, and Volkswagen, to support its plan. The plan also includes establishing recycling capabilities to enable 50% of all its raw material requirements from recycled batteries by 2030.
Co-Founder and Chief Executive Officer of Northvolt, Peter Carlsson, said, “We have been producing cells at our cell industrialization facility, Northvolt Labs, for more than a year and are excited to now bring the knowledge and technology we have developed to the north and start large-scale production.”
Northvolt is mulling building at least two more gigafactories in Europe over the coming decade and is actively exploring the opportunity of building the next of these in Germany to meet its 2030 capacity target.
During the same timeframe, Northvolt foresees tremendous growth in other parts of the European value chain for battery manufacturing, from processing raw materials to component and equipment manufacturing to battery cells and systems and the build-up of recycling infrastructure.
“This is a new European industry in the making, and it will require significant investments over the coming decade. It is encouraging to see that the investor community has identified the opportunity early, and we hope to see more investments throughout the value chain over the coming years,” said Alexander Hartman, Chief Financial Officer of Northvolt.
According to Mercom Capital Group, in Q3 2020, Northvolt raised $600 million in a private placement of equity financing from Goldman Sachs Merchant Banking Division, IMAS Foundation, Scania, Volkswagen, Baillie Gifford, Baron Capital Group, Bridford Investments Limited, Norrsken VC, PCS Holding, Cristina Stenbeck, Daniel Ek.
Northvolt also raised $1.6 billion, in Q3 2020, in debt financing by a consortium of commercial banks, pension funds, and public financial institutions, increasing the total amount of capital raised to date for the development of factories and R&D investments to over $3 billion.
In March this year, Northvolt acquired Cuberg, a U.S.-based battery technology company delivering lithium metal cells produced on existing lithium-ion manufacturing lines for electromobility solutions.
Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.