Northvolt’s most recent funding announcement comes at a time when major nations are drawing up plans to phase out diesel and petrol vehicles.
Mikael Schoberg | Bloomberg | Getty Images
Electric vehicle battery maker Northvolt on Tuesday announced a $1.1 billion funding increase with a range of investors including Volkswagen and Goldman Sachs Asset Management – participation in capital raising.
Sweden’s Northvolt said in a statement that the $1.1 billion convertible bond will be used to finance “the expansion of battery cell and cathode material production in Europe to support rapidly growing demand for batteries.”
Other investors in the uplift are Baillie Gifford, Swedbank Robur, PCS Holding and TM Capital.
Northvolt recently announced that its first gigafactory, Northvolt Ett, has begun commercial deliveries to European customers. The firm says it has orders worth $55 billion from companies such as Volvo Cars, bmwand Volkswagen.
Gigafactories are businesses that produce batteries for electric vehicles on a large scale. Tesla CEO Elon Musk is widely credited as the originator of the term.
Northvolt’s latest funding announcement comes at a time when major European economies are drawing up plans to phase out road vehicles using diesel and gasoline.
The UK, for example, wants to stop selling new diesel and petrol cars and vans by 2030. From 2035, all new cars and vans must have zero exhaust emissions. The European Union, from which the UK left on 1 January. 31, 2020 – pursues similar goals.
As the number of EVs on our roads increases, the competition to build factories capable of producing EV batteries on a large scale is intensifying, with companies like Tesla and VW looking to gain a foothold in the sector.
In a statement released Tuesday, Northvolt CEO and co-founder Peter Karlsson, formerly of Tesla, is optimistic about the future.
“The combination of policy decisions, an even stronger consumer commitment to moving to electric vehicles, and very rapid growth in consumer demand for green products have created the perfect storm for electrification,” he said.
Electric vehicle sales reached 6.6 million in 2021, according to the International Energy Agency. Electric vehicle sales reached 2 million in the first quarter of 2022, up 75% from the first three months of 2021.