A European attempt to build a battery maker that can challenge Tesla and Asia

A European attempt to build a battery maker that can challenge Tesla and Asian rivals has won the backing of Volkswagen, Goldman Sachs, Ikea and BMW, helping the Swedish project to raise $1 billion of fresh capital. Northvolt, a Swedish company set up by former Tesla executives, is using the $1 billion to build its first factory in northern Sweden and a newly announced second plant in Lower Saxony in cooperation with VW, which is based in the northern German state. The fundraising — on top of a promised €350 million loan by the European Investment Bank — puts the Swedish group in pole position to be the first to establish a large European plant to take on Tesla’s gigafactory and those of Asian rivals such as Panasonic… European carmakers have faced criticism for being slower into electric cars than some Asian manufacturers such as Toyota and Nissan as well as Tesla. VW said last year that it would spend €30 billion over five years in an attempt to boost its fledgling production of electric cars to 3 million a year by 2025. VW and Goldman’s merchant banking arm are leading the $1 billion equity fundraising for Northvolt… Construction work will begin in August for the battery cell factory in Skelleftea, close to the Arctic Circle in northern Sweden, with annual capacity set to start at 16 gigawatt hours and be increased to at least 32 gigawatt hours.

Richard Milne