Volkswagen increases its billion-dollar investment in battery manufacturer Northvolt

LinkedIn +

Northvolt, a Swedish battery developer and manufacturer, has announced it has raised US$2.75bn in its latest round of investment.

The US$2.75bn raised in equity enables Northvolt’s expansion plan leading up to and beyond 150 GWh of deployed annual production capacity in Europe by 2030, and is a key milestone in Europe’s industrial ramp up to achieve the European Green Deal objectives, EIT InnoEnergy has said.

Volkswagen is participating, with a contribution of US$620m meaning the Group will maintain its stake in the company constant at about 20 percent. Volkswagen had already invested over a billion dollars in Northvolt in June 2019, acquiring about 20 percent of the shares in the company as well as a seat on the Board of Directors. The production of Volkswagen premium cells is to be concentrated at Skellefteå in cooperation with Northvolt. Production of these cells is due to start in 2023 and the annual capacity intended for Volkswagen is to be built up step-by-step to as much as 40 GWh.

Responding to the need to increase annual battery production to meet growing demand for electrification, new capital from existing shareholders including EIT InnoEnergy, and new shareholders Sweden’s AP 1-4 pension funds and Canada’s OMERS, brings the total financing, in both equity and debt, raised by Northvolt to US$6.5bn.

Welcoming the announcement, Diego Pavia, CEO of EIT InnoEnergy, said: “Northvolt is a tremendously successful initiative. It represents a cornerstone in Europe’s ambition to create an annual €250 billion battery value chain by 2025, as envisioned in 2017 when European Commission Vice President Šefčovič launched the European Battery Alliance and mandated EIT InnoEnergy to lead the industrial ecosystem. It is also a leading example of how Europe can create new industrial value chains, which are at the core of growth, job creation and competitiveness.”

“The European Battery Alliance brings together more than 600 industrial, financial and innovation actors with the objective to build a strong, sustainable and competitive European industrial battery value chain, from mining to recycling. By facilitating collaboration between mission-driven businesses and public institutions on this key energy transition challenge, we Europeans are succeeding in our endeavour to deliver the European Green Deal. Relevant achievements include the number of EVs sold in Europe in 2020 (1.365 million) being triple that of the US, and the investments captured (€60 billion) almost three times that of China.”

Alexander Hartman, CFO of Northvolt said: “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.”

Share this story:

About Author


Comments are closed.