Northvolt AB, a newly-founded Swedish company is raising funds to build a massive battery manufacturing complex.
The factory, which is planned to manufacture lithium-ion batteries, will be on a large enough scale to rival the gigantic ‘Gigafactory’ being operated by Tesla in the US.
Similar to the Gigafactory, Northvolt’s proposed battery manufacturing plant will take advantage of massive economies of scale in order to cheaply produce batteries.
Further cementing this link between Northvolt and Tesla, the Swedish company itself was actually founded by a former Tesla Motors executive.
Northvolt’s factory will be largely automated, but will likely still hire around 2500 to 3000 specialist workers.
Moreover, in order to keep with the company’s vision of a green future, all of the energy used in the production of the batteries at the factory will be sourced from renewables.
Similarly, Northvolt will seek to source the key materials used in the manufacturing of the batteries from nearby Nordic countries, in order to increase overall energy efficiency.
When fully operational – in approximately 6 years time if all goes to plan – the factory will produce 32 gigawatt-hours of batteries per year.
Using these methods, the company believes that it will be able to halve the cost of lithium-ion batteries packs by 2022.
But this factory won’t come cheap – Northvolt expects that it will cost at least €4bn ($4.2bn) to construct.
The company is in the process of finding investors to help fund this project and hopes to accumulate at least €1bn by 2018.
Already Sweden’s largest energy provider, Vattenfall AB has provided seed funding for the project, however, Northvolt is still a long way away from beginning construction.
Nonetheless, the company believes that there will be a huge market demand for lithium-ion batteries in the coming years due to the explosive growth in popularity of electric vehicles.
“This is a bold, very complex, but rational project. Compared with Asia and the US, Europe is behind in the battery industrialization. With societal ambitions when it comes to growth and sustainability, action is needed. The project resonates commercially, since the demand from automotive and energy storage sectors will be huge ” says Paolo Cerruti, COO of Northvolt.