From Sifted, June 24:
The five-year-old Swedish battery startup is already valued at $11.75bn. Can Europe bank on its battery solutions?
In the heart of Swedish Lapland, just below the Arctic Circle, a former Tesla manager is building a battery factory so large it would fill 100 football pitches and produce enough power to light 6bn light bulbs a year.
The mammoth undertaking by Northvolt — which has just raised $2.75bn at an $11.75bn valuation to bring this factory in Skellefteå and other factories elsewhere in Europe to life — is the great hope of not just of the company, but also the entire European car industry.
Founder Peter Carlsson, previously head of supply chain at Tesla, says Northvolt’s operations will be able to supply a vast number of batteries in a way that is more ecofriendly than most, given its ability to recycle old batteries.
“The European car industry really wanted to find a European champion,” he says.
“What is unique with the path that we have chosen, versus where most of the industry has gone, is that rather than using a furnace to melt and recycle the nickel and cobalt, we have gone [down] the hydrometallurgical path.”
The use of this liquid processing technique makes Northvolt one of a small number of companies in the world that is able to recycle lithium — the mineral that gives rechargeable batteries their superpowers. “We are pretty proud that our pilot facilities show [we’re] able to recycle lithium to a high degree,” Carlsson adds.
The startup makes lithium-ion batteries with 80% less CO₂ emitted compared to equivalent options on the market, it says, and it has already struck $27bn worth of deals with automotive companies including Volvo, Volkswagen, BMW and Swedish truck manufacturer Scania.
In February, micromobility startup Tier announced it was partnering with Northvolt to get 5k electric scooters powered by Northvolt batteries on the road by the end of this year.
Europe’s impending battery problem
As the electric vehicle sector skyrockets, experts have increasingly become concerned that the problem of oil-guzzling engines is soon to be replaced with a new issue: what to do with the millions of lithium-ion batteries made to be put in these cars.
By 2030, analysts predict there will be around 145m EVs trundling along the world’s roads, up from just 11m in 2020. Meanwhile, micromobility solutions such as scooters and electric bikes — also powered by rechargeable batteries — are receiving huge amounts of investment from VCs.
Ailin Huang, Tier’s head of sustainability, says the search for more sustainable battery solutions is top of mind for electric scooter companies — “because if we don’t solve these issues, we will effectively end up with the same issue we have with fossil fuels, but batteries.
She says Northvolt makes a compelling partner not necessarily because the batteries themselves are particularly special, but because of its proximity (Tier currently ships its batteries from Asia), and the way it plans to combine both the production and recycling of batteries.
“They are building up their own material stream of secondary resources from recycled batteries,” she says. “And they’re [hoping to] achieve economies of scale that other recycling companies probably won’t be able to.”....
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