Northvolt’s 'Gigafactory of Europe' May Beat Tesla to Completion
The company was founded by a former Tesla executive.
Northvolt, the Swedish battery firm, could beat Tesla at its own game. The company, founded by a former Tesla executive, is expecting to close a €100 million ($118 million) round of funding this fall that will be used to achieve its ultimate goal of building a battery factory to rival the Gigafactory, the under-construction building in the Nevada desert that will one day produce batteries faster than bullets leaving a machine gun. While Tesla plans to build another Gigafactory in Europe, Northvolt’s plan to start production in 2020 means it could beat Elon Musk to the punch.
“Coming out of this partnership round and going into a larger financing round next, we see that it will look favourable to the financial market that we have a number of customers that have already shown commitment by investing in us,” Peter Carlsson, the company’s CEO and Tesla’s former vice president of supply claim management, said in an interview with Bloomberg.
These plans are critical if global industry wants to push for more renewable energy usage. When complete, Northvolt’s factory will produce 32 gigawatt-hours of storage per year. By comparison, Tesla’s Gigafactory is expected to produce 35 gigawatt-hours, a figure CEO Elon Musk has said is enough to transition one hundredth of the world’s energy supply onto renewables. These factories will help suppliers meet a potential boost in consumer battery demand: as prices reach below $100 per kilowatt-hour, electric cars will grow more competitive with traditional vehicles, pushing consumers to make the switch.
Northvolt’s Gigafactory rival will be constructed in one of two locations in Sweden. After considering 10 different locations, the company has started consultations with the municipalities of Västerås and Skellefteå, both located in the east. Northvolt justified its decision to speak with two different municipalities by claiming that the “ambitious” schedule means time is of the essence.
The project, expected to cost around €4 billion ($4.7 billion), has a very strict timetable. In the fall, the company will start the application process for a permit, where environmental issues will be analyzed. Northvolt plans to break ground in the second half of 2018, with plans to start production in 2020.
It’s not the only rival to the Gigafactory in the works. Contemporary Amperex Technology Ltd. (CATL) is building a giant factory in the Chinese city of Ningde. In 2020, about the time Northvolt expects to start production, CATL plans to reach output of 50 gigawatt-hours, up from the five gigawatt-hours produced in 2016 through its smaller operation. If successful, it could make the CATL plant the largest in the world by a long shot.
Watch the company’s introductory video here:
