Stockholm - A former Tesla executive is
trying to raise at least $4 billion to build Europe's biggest
battery factory in Sweden to meet an expected surge in demand as
the region's automakers switch to electric vehicles.
Peter Carlsson, who managed Tesla's supply chain before
returning to his native country, believes European carmakers'
push into electric propulsion implies demand for batteries that
far exceeds anything now planned.
Some carmakers want to ramp up battery production in-house,
wary of the dominance of Asian players such as Panasonic, LG Chem, and China's CATL.
German company BMZ opened the first section of a battery
plant last year while LG Chem is investing $339 million in a
factory in Poland, both of which include the manufacture of the
battery cells.
Samsung SDI has said it will start production of
batteries for electric vehicles in Hungary in 2018, establishing
an integrated production system ranging from battery cells to
packs.
Carlsson's company Northvolt is looking to rival the scale
of Elon Musk's Gigafactory in the Nevada desert - targeting
annual cell production equivalent to 32 gigawatt hours when the
plant hits full gear in 2023.
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Production would be largely automated but the factory could
potentially employ 2 500 to 3 000 skilled people. The site would
use cheap renewable energy and could source some key battery
ingredients such as nickel, cobalt and lithium from within the
Nordic region.
While the Tesla Gigafactory began mass production this year
in partnership with Japan's Panasonic, Northvolt
has yet to identify a site for its project which would require
investment of at least 4 billion euros ($4.2 billion) over six
years.
"I am very optimistic that we can attract both industrial
investors as well as institutional investors," Northvolt CEO Peter Carlsson, a former head of supply chain at
Tesla, said on the sidelines of a presentation.
"We hope to close the major investment in just over a year,
but we have already begun talking to companies and institutions
that could be leading players in the process."
So far a small group of investors including utility
Vattenfall and Sweden's energy and innovation agencies have
contributed funds allowing the firm to set up offices in central
Stockholm and begin recruiting staff for the project.
Electrification has become a buzzword among automakers in
recent years amid global concerns about climate change.
Consultants CRU Group have said electric car and plug-in hybrid
vehicle sales could hit 4.4 million in 2021 and more than six
million by 2025, from 1.1 million last year.
Apart from servicing the automotive sector, Northvolt also
sees business in areas such as energy storage and heavy
industrial machinery.
"We are not going to fill the plant only with automotive.
Not because we don't think it is possible, but we don't think it
is a good idea to depend heavily on one vertical, and only one,"
said Northvolt Chief Operating Officer Paolo Cerruti, who also
worked for Tesla in the past.
Carlsson said Northvolt had begun selecting a location for
the plant and would start raising 50 million euros to fund a
smaller-scale pilot line in the coming months.
Asked how Tesla chief Elon Musk viewed Northvolt's plans,
Carlsson said: "We are not competing with Tesla because they are
not going to sell batteries, but we do share a very strong
vision which is that it is hugely important to accelerate our
society away from its addiction to fossil fuels."