Northvolt’s most recent funding announcement comes at a time when major economies are drawing up plans to move away from vehicles that use diesel and gasoline.
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Electric vehicle battery maker Northvolt announced a $1.1 billion funding raise on Tuesday, with a series of investors – including Volkswagen and Goldman Sachs Asset Management – participating in the capital raise.
In a statement, Sweden-based Northvolt said the $1.1 billion convertible note would be used to fund “the expansion of battery cell and cathode material production in Europe to support growing demand for batteries”.
Other investors in the raise include Baillie Gifford, Swedbank Robur, PCS Holding and TM Capital.
Northvolt recently said its first gigafactory, Northvolt Ett, has begun commercial deliveries to European customers. The company says it has orders worth $55 billion from companies including Volvo Cars, BMW and Volkswagen.
Gigafactories are facilities that produce batteries for electric vehicles on a large scale. Tesla CEO Elon Musk has been widely credited with coining the term.
Northvolt’s most recent funding announcement comes at a time when major European economies are drawing up plans to move away from on-road vehicles that run on diesel and petrol.
The UK, for example, wants to end the sale of new diesel and petrol cars and vans by 2030. From 2035 it will require all new cars and vans to have zero exhaust emissions . The European Union – which the UK left on January 31, 2020 – pursues similar goals.
As the number of electric vehicles on our roads increases, competition to develop factories capable of making large-scale EV batteries is heating up, with companies like Tesla and VW looking to get into the sector.
In a statement on Tuesday, Northvolt CEO and co-founder Peter Carlsson – who previously worked for Tesla – was optimistic about the future.
“The combination of political decision-making, customers becoming even more strongly committed to the transition to electric vehicles, and a very rapid increase in consumer demand for cleaner products, has created a perfect storm for the industry. ‘electrification,’ he said.
According to the International Energy Agency, sales of electric vehicles reached 6.6 million in 2021. In the first quarter of 2022, sales of electric vehicles reached 2 million, an increase of 75% compared to the first three month of 2021.