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Northvolt picks Sweden for electric car battery plant

October 19, 2017

Northvolt has said it will build Europe's biggest electric car battery factory in its home country, Sweden. The start-up wants the site to rival Tesla's 'Gigafactory' in the US and LG Chem's proposed site in Poland.

Smart III-Batterie für Elektroautos
Image: picture-alliance/dpa/A. Burgi

Northvolt said on Thursday it had selected Skelleftea, a coastal town in the industrial north-east near Sweden's main nickel, cobalt, lithium and graphite deposits. Northvolt is in talks with several companies about sourcing battery ingredients such as nickel, cobalt and lithium.

The project would cost four billion euros ($4.7 billion) over six years and financing is already covered, Peter Carlsson, Northvolt's founder and CEO, said. Other reports suggest the company is still looking how to finance the scheme.

The factory will be aimed at electric cars and other new eneregy vehicles (NEVs), renewable energy producers looking for electricity storage, as well as industrial companies.

Construction will start in the second half of 2018 and it is planned to raise production gradually between 2020 and 2023. Once fully operational, the site is slated to produce lithium-ion batteries totalling 32 Gigawatt hours (GWh) per year and employ up to 2,500 people.

The factory comes in response to Tesla founder Elon Musk's "Gigafactory" in Nevada where production debuted in January and which Tesla hopes to get up to 150 GWhs.

A company research center employing 300 to 400 people will also be located in Vasteras, 150 kilometres (90 miles) west of Stockholm and the original headquarters of Swedish-Swiss ABB, Northvolt's partner on the project.

"Europe is rapidly moving towards electrification," Carlsson said. "Sweden has a unique position to establish large-scale battery production to support this transition with its clean and affordable energy, proximity to raw materials, and a strong industrial tradition deep in its DNA," he added.

Sweden's economy minister Mikael Damberg said it was "a great day, not just for the two chosen cities but also for Sweden and for Europe."

A crowded market

The market for e-car batteries is becoming increasingly cramped as the main industrialzed economies set timetables for moving towards electric forms of transportation and weaning themselves off carbon-intensive fuel. 

Tesla is considering plans for another factory, this time in Europe, with Portugal, Sweden and France possible destinations.

South Korea's LG Chem said last week it will open Europe's largest lithium-ion battery factory in Poland next year, employing 2,500 workers to produce up to 100,000 electric vehicle batteries per year.

Carlsson wants the Swedish plant to rival the scale of Tesla's Gigafactory in the Nevada desert, and is targeting annual cell production equivalent to 32 gigawatt-hours by 2023, making it much bigger than LG Chem's Polish plant.

jbh/uhe (AFP, Reuters)