Europe joins EV battery race
Electric vehicles (EVs) are becoming mainstream in Europe. For example, they accounted for almost one-fifth of all new-car purchases in the UK in December.
Now the continent is making its own lithium-ion battery cells with Northvolt, a start-up, producing them at a plant in Sweden.
It is the first of a series of new factories investors hope will allow Europe to take out a big proportion of the EV market, and weaken what has been built up by manufacturers in China, Japan and South Korea.
The Northvolt Ett site is the first European-owned plant to produce at so-called gigafactory scale. Gigafactories are generally considered to be those capable of producing enough batteries each year to provide about 15 gigawatt hours (GWh) of cumulative storage.
Only two large battery factories are operational in Europe – a factory in Wrocław, Poland run by LG and Samsung’s near Budapest in Hungary. Both are South Korean companies.
However, some 25 gigafactories are planned for the continent by 2030 as the industry races to keep up with EV demand. Nine of those are owned by Asian manufacturers, which control most of the global supply.
The UK is arguably further behind the rest of Europe with plans for only two gigafactories. One will be a major expansion of a small plant in Sunderland by the Chinese company Envision, while the Glencore-backed start-up Britishvolt is trying to secure funding for a rival in nearby Blyth.
The authorities in Coventry are trying to find a manufacturer for a third site at the local airport but nobody has yet stepped forward, creating doubts over the prospects on the UK’s automotive sector as it strives to replace the internal combustion engine industry.
Despite its start-up status, Northvolt has secured backing from Volkswagen and investment bank Goldman Sachs. Its US$2.75 billion funding round in June valued it at US$12b.
Northvolt hopes to expand production at the plant at Skellefteå, pictured, to produce 60GWh a year – enough to supply batteries for about one million electric cars. Commercial deliveries will start in the new year.
The start-up already boasts contracts worth US$30b with European companies such as carmakers BMW, Volkswagen, Volvo Cars and Polestar, truck manufacturer Scania and energy-storage company Fluence.
