Batteries included? Northvolt is working hard to meet 2021 launch target

STOCKHOLM, Dec. 17 (Reuters) – Northvolt CEO Peter Carlsson wants to take on former boss Elon Musk with the world’s greenest electric vehicle batteries. But he must start by producing them.

The Swede is determined to open his factory, some 200 km south of the Arctic Circle, this month, which means he and his team of engineers and technicians are working at a pace that would rival the little helpers of the Santa Claus.

“We are working extremely intensely right now to meet this schedule, and while that means the first battery is made on New Years Eve, it is coming out this year,” Carlsson told Reuters.

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The lithium-ion plant was the first to be built in the European Union by a European company and is said to be the launching pad for a regional battery champion who can compete not only with Tesla but also with suppliers. Asian, including Panasonic (6752.T). , LG Chem (051910.KS) and CATL (300750.SZ).

Northvolt has raised over $ 6.5 billion in funding from Volkswagen (VOWG_p.DE), the European Commission and Spotify founder Daniel Ek, plus contracts worth over $ 27 billion from car manufacturers.

It plans to produce enough batteries to power more than a million electric vehicles (EVs) per year at its Swedish plant in the former gold mining town of Skelleftea, and then to power other sectors moving to the electric, such as industrial machinery and ferries.

Carlsson aims to open at least two more factories over the next ten years.

A former head of production and supply chain at Tesla, which he left in 2015, Carlsson hopes his experience working with Musk to develop the billionaire’s California plant will help him in the snow-capped areas of northern Sweden.

“During my years at Tesla with Elon, I learned how fun it is to build and grow, and also how very difficult it is,” Carlsson said.

“There are always supply chain issues when you start to scale… I think that’s something we’re going to be focusing on very, very over the next couple of years. “

Recalls of electric vehicle batteries from some of the largest producers have shown how demanding it is to produce batteries on a large scale, coupled with the establishment of an “extremely complex” supply chain with risks to it. both corporate and geopolitical.

“Achieving this (product quality) while increasing production for the first time is obviously a huge challenge,” said Hans Eric Melin, founder of London-based consultancy Circular Energy Storage.

GREEN IDENTIFICATIONS

Northvolt currently employs around 2,500 people in 108 countries and plans to add 5,000 more engineers over the next five years.

Northvolt and Volvo Cars (VOLCARb.ST), which aims to go fully electric by 2030, are expected to announce a location in Europe for a joint gigafactory early next year.

“We could make our own batteries and start from scratch,” Volvo CEO Hakan Samuelsson said in an interview. “But I don’t think it would be effective enough.”

The competition for talent is fierce. Most of the battery engineers are based in Asia, and Asian suppliers such as LG and Samsung SDI are setting up factories in Europe. Other startups are also trying to establish themselves.

Tesla is looking to recruit for its gigafactory in Berlin.

Skelleftea – pronounced as ‘she left you’ – cannot compete with the German capital’s club scene and its climate can be ominous with snow cover from November to April and only a few hours of sunshine during the winter.

But Carlsson relies on the green credentials of the city and the factory to attract engineers. Skelleftea operates largely on renewable energy from hydropower and wind power and the plant will be 100% renewable. The batteries will also be recycled there.

“As we move into new generations of skills and talents, a paycheck isn’t enough, they want a goal, they want to be part of a mission,” he said.

Money is still important, however, with each employee being offered a share of the business in the form of an equity stake as part of their salary.

And Northvolt is building an entire ecosystem to welcome staff from as far away as South Korea, Japan, and India with company-sponsored accommodations and social events, including ice hockey and cross country skiing. fund. He plans to circulate electric helicopters between Skelleftea airport and the current factory.

To carry out Northvolt’s expansion plan, the company needs regular cash injections.

The $ 6.5 billion in funding already raised will not be enough, according to Carlsson.

Northvolt is aiming for the Skelleftea plant to achieve a production capacity of 60 gigawatt hours – which could power up to 1 million cars per year depending on the size of the battery – as it wants to grab at least 20 to 25% market share in Europe by 2030.

Last week Volvo Cars and Northvolt announced the opening of a joint research and development center in Sweden as part of a $ 3.3 billion investment. Read more

Melin, the consultant, said Northvolt may well meet its production and market share targets.

“With favorable winds, a secure supply of raw materials and a well-positioned product mix, I don’t see what could stop them. But these are big ifs,” he said.

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Editing by Carmel Crimmins

Our standards: Thomson Reuters Trust Principles.

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