Swedish government backs Northvolt battery plant to tune of €15m

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Northvolt’s planned €4 billion large-scale lithium-ion battery production facility in Sweden has received yet more financial backing, this time in the form of a SEK 146 million (approximately €15 million) from the Swedish Energy Agency (Energimyndigheten).

This is the fourth sizable tranche of financial backing for the project, following ABB’s initial support, wind giant Vestas’ €10 million investment, and Scania’s €10 million investment in boosting R&D support for heavy electric vehicle battery research at the pilot plant in Västerås.

Northvolt’s intention is to create a battery production hub in Europe to rival Tesla’s gigafactory in the U.S., the difference being that Northvolt hopes to combine cell R&D with mass-scale battery production and commercialization. Tesla currently partners with Japan’s Panasonic for the production of its cells.

The Swedish Energy Agency is government-backed, and thus its involvement is a display of confidence in Northvolt’s project. Sweden, like much of the EU, is accelerating its deployment of electric vehicles (EVs) on its roads, and sees financial support for projects such as this as key to altering its transportation – and ultimately distributed and large-scale storage – landscape.

“Sweden’s unique, safe, competitive and green energy system is an important factor in the creation of new industry and jobs,” said the Agency’s Energy Director General Erik Brandsma. “The transport switch to electrification creates new opportunities, and large-scale battery production is important for Sweden’s central role in the conversion and mitigation of the climate impact of the transport sector in Sweden and globally.”

Northvolt CEO Peter Carlsson added that the establishment of the pilot plant in Västerås will act as a starting point for the European battery supply chain, expediting the continent’s shift from fossil fuels to renewables.

Around 100 people will initially be employed at the pilot plant, excluding staff for R&D. A further 2,500 jobs are expected to be created at the actual production site, planned for the city of Skellefteå.

The Swedish Energy Agency will release its funding of SEK 146 million across various stages of the project’s development, between now and 2023. The grant corresponds to around 20% of the supportive costs required. Scania, the truck manufacturer, has already steered €10 million towards Northvolt, while Switzerland’s ABB has funded an undisclosed amount to co-finance the project.

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