In 2017, a start-up announced a bold and simple plan: develop the world’s greenest battery cell and establish one of Europe’s largest battery factories. Here is the story of Northvolt.
The verdict of the IPCC report in late 2018 was unequivocal: the world needs to act within 12 years in order to avoid catastrophe.
Six years previously, Peter Carlsson and Paolo Cerruti met at Tesla’s factory in Fremont, California. They had both recently joined the company to head up supply chain operations.
Peter had joined Tesla from NXP Semiconductors in Singapore, and before that Sony Ericsson in Sweden. He holds almost two decades’ experience working in manufacturing, purchasing and supply chain operations.
It was Peter who convinced Paolo to leave Paris and join Tesla in California.
Shortly after graduating in Aerospace Engineering Paolo began working at Renault-Nissan. He spent fifteen years with the company in France, Japan and India before joining Tesla.
Around this time, global industries were in a state of flux. Renewable energy was on the rise. Electric vehicles were becoming a competitive product. And electrification was sweeping across industries. Across it all, there was a common denominator – batteries.
Mapping the supply chain for the Tesla Model S, it became clear that battery cells were a critical strategic asset but that global supply wouldn’t come close to covering demand. Tesla took the decision to build its own battery factory – Gigafactory 1 – in Nevada.
Some 8,600 km away in Stockholm, Carl-Erik Lagercrantz and Harald Mix, who had jointly established the green-tech investment company Vargas, reached the same conclusion as Tesla.
Harald Mix is the co-founder of the private equity firm Altor. He was previously deputy CEO and co-founder of Industri Kapital. He holds a BSc from Brown University and an MBA from Harvard University.
Harald founded Vargas together with Carl-Erik Lagercrantz focused on enabling sustainable industry early stage investments.
Driving that demand for lithium-ion batteries are three key sectors: electric vehicles, energy storage and industrial applications.
Carl-Erik Lagercrantz – Calle – is the Chairman of the Board at Northvolt. He holds the same position at Incell International. His background is within telecom and he has served as CEO for British Telecom Nordics and Baltics.
Carl-Erik decided to reach out to Peter, whom he had followed closely from Sweden, to discuss European battery production. What he didn’t know was that Peter was still in California, where it was 4 o'clock in the morning.
Part 2: Early Days
As the idea took hold, the small group began work on a pre-study.
Over the course of six months Paolo and Peter travelled the world to meet with potential customers, suppliers, politicians and other stakeholders, and to recruit a team.
One evening in fall of 2016, the decision was made: a European battery gigafactory would be built. Operating under the name of SGF Energy, the small group gradually began to grow into a hand-picked team of experts.
A key moment was the welcoming of Yasuo Anno – Anno-san – who moved to Stockholm from Tokyo to join the endeavour. He had spent several decades in leading roles within the Japanese battery industry, including at BASF TODA, Panasonic and Sony.
Anno-san would not only play a key role establishing Northvolt’s technology roadmap, but his stature in the industry would prove invaluable in building its cell design team.
As the team grew, a base of operations was required. A project office was set up on Gamla Brogatan in Stockholm.
A scrappy vibe was evident when newly appointed Chief Financial Officer, Alex Hartman, was given the responsibility of installing the ceiling lamps which haven’t failed to this day.
Elsewhere, the small business development team joined forces with the company’s cell designers to put together IKEA desks.
The team started to put together what would become Northvolt’s masterplan. A company launch date was set for March 2017.
Part 3: Coming Out of Stealth Mode
On March 7, 2017, Northvolt announced its plans to the outside world. The response was immediate.
The Northvolt mission: build one of Europe’s largest battery cell factories with annual production of 32 GWh – enough to power more than 500,000 electric vehicles.
Central to the vision would be clean energy, recycling and sustainable processes – all geared to ensure that the gigafactory would produce the world’s greenest battery.
At launch, Peter attempted to visualize the factory’s cell output using a bag of rice. It also illustrated the secret sauce to reducing cost: building at scale in combination with vertical integration of production processes.
The gigafactory would be built in one location (it was later split into two), produce only cylindrical cells (it now will produce two form factors) and the goal was to put the shovel in the ground within 18 months (it took 13 months).
Although the plans changed, the overall direction was confirmed by other battery manufacturers presenting similar projects in Europe.
The scale of the project was unprecedented. Prerequisites for success went beyond financing, and included: comprehensive environmental permitting, a top-notch site with access to large amounts of clean energy, and endorsement from both customers and suppliers.
Part 4: Building the Team
June 2017, Stockholm. Now 25 people strong, Northvolt has its first team picture taken.
People came from far and wide to join Northvolt.
Japan – the birthplace of the lithium-ion battery – has been key to Northvolt. Japanese, and later Korean, members of the team, which has been put together by Anno-san, have played a crucial role in building up the cell technology roadmap and supporting the rest of the team.
Today there are more than 30 Japanese and Korean engineers working at Northvolt.
The company is incredibly diverse, with some 45 nationalities working alongside one another, hailing from companies such as Tesla, Scania, Daimler, LG Chem, Panasonic, Spotify and Google.
From the earliest days Northvolt embraced bringing in graduate students through a summer internship program which continues to this day.
By spring of 2019, just two years after the launch, Northvolt surpassed 250 employees.
Part 5: Picking the Site
After the launch, the team put all its efforts into the number one priority: deciding upon a final location in the Nordics for the factory.
Emma Nehrenheim is Northvolt’s Chief Environmental Officer. She joined the company from ABB and has a background from the academic world, where she worked as a professor in Environmental Engineering.
Emma’s team was given the responsibility for the site selection process.
Those two locations: Skellefteå, 700 km north of Stockholm, and Västerås, 100 km west of Stockholm.
Skellefteå is part of a raw material and mining cluster in the north of Sweden and has a long history of process manufacturing and recycling.
Västerås has a strong standing within energy and electrification industries. It is home to several multinational companies, including ABB, with world class engineering and R&D competence in electrification and process optimization.
Northvolt decided to initiate environmental permitting processes for both locations in parallel.
September 7, 2017. Peter presents the Northvolt project to the Västerås municipality board.
And to the Skellefteå municipality board a few days later.
On September 14, around 1000 people attended a public consultation in Skellefteå as a part of the environmental permitting process – probably a new Swedish record.
Hosted at Northvolt offices in Stockholm, the press conference was attended by national and international press, the mayors of Västerås and Skellefteå, and the Swedish Minister of Enterprise.
In the end, a split set up proved to be the best solution. Something to which both city mayors and the Swedish Minister of Enterprise seemed to agree with.
Part 6: Europe Gets Behind Northvolt
Northvolt started to engage with industrial companies around the opportunity to invest in the company to enable the establishment of Northvolt Labs. The interest was high, but the team soon realized that lead times would prove to be longer than first expected.
In September 2017, Northvolt made a significant breakthrough – securing its first industrial partner in Swedish-Swiss technology company ABB.
Wind power leader Vestas partnered with Northvolt to collaborate on lithium-ion battery platforms for its power solutions.
Scania and Northvolt also announced a partnership for development and commercialization of battery cell technology for heavy commercial vehicles.
Siemens joined the mission to digitalize the factory design process and with the goal of making Northvolt its preferred supplier of batteries.
Another milestone was met when world-leading automaker BMW partnered with Northvolt.
In the meanwhile, Northvolt was selected by Epiroc as the supplier of battery systems for their fleet of electrified underground mining machines.
The Northvolt Battery Systems team delivered the company’s first product in August 2018.
The Epiroc ST14 Scooptram, powered by a Northvolt battery system, in action.
As batteries grew as a political issue, Northvolt did not go unnoticed by European political actors. Just as support from the European industry was crucial, so was political backing.
In February 2018, the European Investment Bank approved a loan for the establishment of Northvolt Labs.
Support from the Swedish Energy Agency also played a key role, with a grant of €13.6 million to support the establishment of Northvolt Labs.
With all the pieces in place, Northvolt sent out an invitation for the groundbreaking of Northvolt Labs in Västerås.
An electrified scooptram from Epiroc broke ground in Västerås.
The groundbreaking was attended by Vice President Maroš Šefčovič of the European Commission, Swedish Minister of Enterprise, Mikael Damberg, and Vice President of the EIB, Andrew McDowell.
The groundbreaking in Västerås not only marked a key step towards the launch of the gigafactory, it also marked an important step towards strengthening the European value chain for batteries.
Part 7: Northvolt Labs
Northvolt Labs will host a demo manufacturing line that will be used to qualify and industrialize products and processes together with customers. It is a 19,000 square meter building which will have an annual capacity of producing over 350 MWh.
Targeting construction commencing in spring 2018 and start of production in 2019, the timeframe was tight.
In the background to construction of Northvolt Labs, an R&D facility was established just across the street in ABB’s facilities.
The R&D line was set up in order for the Northvolt team to get a head start with developing cells.
Most of the machines, just like those planned for the demonstration line and Northvolt Ett, are from Asian suppliers.
Using the R&D line, Northvolt produced its first prismatic cell in early 2019.
Northvolt Labs will also be used as a training ground to get ready for Northvolt Ett in Skellefteå.
Alongside construction of Northvolt Labs, Northvolt established its battery systems assembly facility in Gdansk, Poland.
It is here where cells from Northvolt Ett will be shipped, for assembly into battery modules and larger systems.
In an early accomplishment at the facility in April 2019 – while the assembly line was still being set up – engineers delivered Northvolt’s first stationary storage unit: Voltrack.
Part 8: Northvolt Ett
At the heart of Northvolt is Northvolt Ett. Unique to its design, Northvolt Ett will host active material preparation and recycling capacities, alongside cell assembly, and auxiliary processes.
To be developed as a phased built, the first quarter of Northvolt Ett be operational in 2021 and will produce 8 GWh worth of battery capacity per year. Fully built out, the factory will be one of the largest in the world – producing 32 GWh per year.
From mine to product, battery manufacturing typically involves a complex supply chain, with multiple players fulfilling distinct roles...
In contrast, Northvolt will bring much of the supply chain in-house...
On June 7, 2018, Northvolt received an environmental permit for the first phase of the establishment. Ground preparations commenced the very next day.
Northvolt employees visited Skellefteå during summer 2018 to get acquainted with the site.
Carl-Erik Lagercrantz documenting the 50 hectar site that will host the first part of the factory.
Part 9: The World's Greenest Battery
Northvolt’s mission is to build the world’s greenest battery with a minimal carbon footprint and the highest ambitions for recycling.
Northvolt’s commitment to sustainability encompasses sourcing of raw materials, manufacturing, transportation of goods, and novel recycling technologies.
Producing 1 kWh of battery capacity requires up 60-80 kWh of energy – emphasizing the importance of using CO2 free energy for cell production.
Together with Chalmers University in Gothenburg, Northvolt is developing a new recycling method based around hydrometallurgy.
Given its use of vertical integration combined with novel smart data technologies, Northvolt has a unique opportunity to ensure traceability in the supply chain.
Part 10: The Future
The future demand for batteries
Northvolt’s future cell development road map
The future for a green battery blueprint
The future of Northvolt