Northvolt will expand its Swedish gigafactory, Northvolt Ett, from 40 to 60 GWh of annual capacity to meet increased customer demand.

Northvolt AB, the Swedish battery developer and manufacturer said Wednesday that it closed a $ 2.75 billion private placement co-led by new investors AP funds 1-4, via the co-owned company, 4 to 1 Investments, and OMERS, one of Canada’s largest defined benefit pension plans, alongside existing investors Goldman Sachs Asset Management and Volkswagen Group (ETR: VOW3).  Northvolt will use the funds to expand its battery capacity and boost its R&D efforts. (Northvolt)

Other investors in the equity raising included existing investors AMF, ATP, Baillie Gifford, Baron Capital Group, Bridford Investments Limited, Compagnia di San Paolo through Fondaco Growth, Cristina Stenbeck, Daniel Ek, IMAS Foundation, EIT InnoEnergy, Norrsken VC, PCS Holding, Scania and Stena Metall Finans.

The round reportedly valued Northvolt at $11.75 billion, but that figure has not been confirmed officially by the company. The total investment in the company is now at about $6.5 billion.

Ramping up capacity to meet rising demand

Northvolt already has orders in hand in excess of $27 billion from key auto manufacturers such as BMW (ETR: BMW), Fluence , Scania, and Volkswagen for the supply of lithium-ion batteries used to power electric cars.

In the medium term, Northvolt will expand its Swedish Gigafactory Northvolt Ett, from 40 to 60 GWh of annual capacity. This expansion has been necessitated by higher demand from marquee customers, including a $14 billion order from Volkswagen received earlier this year. This factory is expected to start production later this year.

In the long term it plans upto and beyond 150 GWh of annual production capacity in Europe by 2030. It also plans to establish recycling capabilities to enable 50% of all its raw material requirements to be sourced from recycled batteries by the same year. These plans require the establishment of at least two more gigafactories in Europe over the next 10 years.

Green batteries

Northvolt plans to produce “the world’s greenest batteries” using renewable energies instead of fossil power such as coal. As a result its batteries would have an 80 percent lower carbon footprint.

Additionally, it would recycle its batteries in house and the use the resulting raw materials in the manufacture of new batteries.

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