Northvolt has lowered the estimated cost for their planned battery factory in Sweden. The company founded by former Tesla manager Peter Carlsson has stated that they will spend “considerably less” than the initially stated 4 billion euros on the factory.
The announcement was made by COO Paolo Cerruti, without mentioned new numbers, however. The reason for the reassessment was that Northvolt had found ways to increase productivity, while decreasing resource and energy expenditure.
Furthermore, Northvolt is also looking for new investors. This may prove more difficult than expected though; The battery manufacturer is under increasing pressure from Chinese competition, who have already established the technical know-how, supply chains and relationships to vehicle manufacturers, making for lower margins and high risk. For example, it was recently announced that CATL will be establishing a battery manufacturing facility in the German Erfurt. The factory will supply Volkswagen, Daimler, BMW, PSA and Renault-Nissan with battery cells.
In the first financing round, Northvolt was able to reach their goal of 80 to 100 million euros, but it took longer than expected. Although partners ABB and Scania both invested 10 million euros, and the Swedish energy company Energimyndigheten added 15 million to the pot, the largest financial boost came from the European Investment Bank with the Swedish government with 52.2 million euros.
The financing round was saved by the addition of Siemens, who added another 10 million euros, as well as listing the company as a preferred supplier. A few days ago, the Swedish battery manufacturers also received official permission for the construction and operation of the planned lithium-ion battery cell factory.