Northvolt to buy former paper mill for electric-car battery production

08 March 2022

electric cars

Swedish startup Northvolt has signed a letter of intent with Stora Enso to buy a former pulp and paper mill in Borlänge, Sweden, where Northvolt wants to develop a manufacturing site for active materials and battery cells for electrically-chargeable vehicles (EVs). The gigafactory will go into operation in 2024 and will use 100% clean energy from the region.

The site will have a potential annual production capacity of more than 100GWh for powering EVs and will also feature cell production. It is noteworthy that Northvolt aims to reuse and refurbish much of the existing facilities and site layout at the historic mill, which first opened its doors in 1900 and closed in 2021.

Circular EV batteries

‘Since Northvolt’s founding, we have focused on circular battery production, but this is the first time we will reuse an entire production site,’ said Peter Carlsson, a former Tesla executive who co-founded Northvolt and is its CEO. ‘With its access to energy, industrial water and the broad production know-how in the region, Kvarnsveden is an optimal site for a gigafactory.’

The project will help Northvolt advance its objective to deliver ‘the world’s greenest lithium-ion battery.’ The company’s order books are full, and the factory will play a play a major role in fulfilling more than $50 billion (€45 billion) in orders from customers across Europe, it said.

Northvolt was founded in 2016, with some of its key automotive customers including BMW, Scania, Volkswagen (VW), Volvo Cars, and Polestar. It plans to increase its recycling capabilities by 2030 to allow for 50% of all its raw-material requirements to be sourced from recycled batteries. The startup has grown rapidly since its launch as Europe transitions to decarbonising transportation.

‘There is a massive global demand for sustainable, high-quality lithium-ion battery cells and systems. With the blueprint developed at Northvolt Labs and Northvolt Ett, we will now put in another gear to scale up production even faster and larger than before,’ said Carlsson.

Stora Enso is a forestry company and has been looking for a new owner since closing the site last year. Both Northvolt and Stora Enso said the agreement will allow for continued growth in the region.

Automotive supply

Northvolt has close ties with Volvo Cars, with the two companies recently announcing plans to build their joint battery plant in Gothenburg. The 50GWh plant will create up to 3,000 jobs and produce electric car battery cells specifically developed for use in battery-electric vehicles (BEVs) by the Volvo and Polestar brands. Operations are due to commence in 2025.

Northvolt’s gigafactory in Skellefteå, northern Sweden, assembled its first battery cell in December – the first time a European company has designed and built a cell. Marked as a major milestone for the startup, the company plans to ramp up production capacity in the coming years to serve its automotive industry and energy-storage customers.  

VW remains the company’s largest shareholder, with the German carmaker last year investing €500 million in Northvolt as part of a financing round. VW currently holds a stake of around 20% in the Swedish startup. In 2019, VW had already injected €900 million into Northvolt.