Two former Tesla executives are planning to construct a large lithium ion battery manufacturing facility in Scandinavia, either in Sweden or Finland. Peter Carlsson was in charge of Tesla’s supply chain operations and is now CEO of Northvolt. He is joined by another former Tesla executive, Paolo Cerruti, in the new venture. “I am very optimistic that we can attract both industrial investors as well as institutional investors. We hope to close the major investment in just over a year, but we have already begun talking to companies and institutions that could be leading players in the process.”
Cars with batteries — either plug-in hybrids or fully electric cars — will play an increasingly important role in the European automobile market in coming years as car companies struggle to comply with strict carbon emissions standards imposed by the European Union. Many in the European automotive sector are concerned they will be held hostage by Asian battery companies like Panasonic, Samsung SDI, and LG Chem unless they begin now to make plans for European factories. “If nobody does anything, Europe is going to be completely dependent on an Asian supply chain,” Carlsson told the Financial Times, adding that “it’s now or never.”
Northvolt is seeking investors to build a $4 billion battery plant that will be able to manufacture 32 gigawatt-hours of batteries by 2o23. “We are not going to fill the plant only with automotive. Not because we don’t think it is possible, but we don’t think it is a good idea to depend heavily on one vertical, and only one,” says Cerruti. The two executives say their intention is not to compete directly with Tesla and its Gigafactory 1 located outside Reno, Nevada. “We are not competing with Tesla because they are not going to sell batteries, but we do share a very strong vision which is that it is hugely important to accelerate our society away from its addiction to fossil fuels.
Northvolt is focusing on building its battery plant in Sweden but has also shown interest in Finland because of that country’s significant lithium deposits. Finland is also home to large deposits of cobalt, which is used in lithium ion batteries. Cobalt supplies have tightened lately thanks to hedge funds making large investments in cobalt deposits. The Finnish city of Vaasa made a proposal to Tesla last year for a future gigafactory, based on its location near the largest of those deposits, in Kaustinen. Tesla CEO Elon Musk has said the world will need 100 Gigafactories in order to meet worldwide demand for energy storage. He says he hopes he doesn’t have to build them all himself. Carlsson and Cerruti are happy to see that Elon gets his wish.
So far, Carlsson has been able to secure initial funds from Swedish utility company Vattenfall and the Swedish government — enough to open a small office and being recruiting talented engineers and production experts. Carlsson says the company has begun the process of choosing a location for the factory and will start raising $60 million to fund a small scale pilot line in the coming months.