Volkswagen and BMW are among investors in Europe’s biggest lithium-ion battery plant, Sweden’s Northvolt said on Wednesday after it raised $1 billion in equity capital to complete funding for the facility.
Volkswagen said separately it was buying about 20 percent of the shares in Northvolt, which is also setting up a joint venture with VW to build a battery cell factory in Salzgitter, Germany.
Northvolt said construction of the Swedish plant in Skelleftea would begin in August, to provide an initial 16 GWh of cell manufacturing capacity.
The company said it had already sold a significant part of planned production volumes at a combined order value of more than $13 billion through 2030.
“Today is not only a great milestone for Northvolt, it also marks a key moment for Europe that clearly shows that we are ready to compete in the coming wave of electrification,” Northvolt CEO and former Tesla executive Peter Carlsson said.
Swedish pension fund firms AMF and Folksam and IKEA-linked IMAS Foundation also contributed to the equity capital raising, which was led by Goldman Sachs and VW, Northvolt said. The European Investment Bank is among the project’s lenders and will provide a 350 million euro loan, its largest ever direct financing of battery technology.
VW said the 16 GWh joint venture plant in Salzgitter is slated to begin production around the end of 2023/beginning of 2024.
VW said it will have a seat on Northvolt’s board, subject to approval under antitrust legislation.
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“With Northvolt, we have now found a European partner whose know-how and sustainable, CO2-optimized battery cell production processes will enable us to advance cell production here in Germany,” VW’s procurement chief, Stefan Sommer, said.