Northvolt AB raised $1 billion in its biggest financing round yet to help pay for extra production capacity and support its Nordic role in Europe.
VW and BMW AG announced the private placement on Wednesday as a supplier to manufacturers including Volkswagen AG and BMW AG. It was co-led by existing pension funds AP 1, AP 2, AP 3, AP 4 and Omers Capital Markets, with Swedish investors Goldman Sachs Asset Management and VW Group.
The company, which was founded by former executives from Tesla Inc. currently leads European efforts to build a domestic supply chain for lithium-ion battery components. As European projects in the region gather pace, Northvolt has a target of reaching a 25% share of the regional market by 2030.
Northvolt, which is not only a customer but also a shareholder in Volkswagen, contributed $620 million to the financing round, it said in a statement. The capital injection allows it to keep a roughly 20% stake in the Swedish company.
ATP, Denmark's largest pension agency, said it added 900 million dollars to an existing investment and the total to 1.5 billion kroner. Bo Foged, its chief executive, said that ATP's involvement in Northvolt in the past two years '' has obviously not been without risk, but Northvolt breathes sustainability into the entire value chain, and that best fits with our own ambition.
The raised funds in the annual funding round will be used to expand the next capacity at the Northvolt Ett factory in Skelleftea, Sweden, to 60 gigawatt hours, from an earlier target of 40GWh.
It was a solid base of world-class investors and customers who share the Northvolt mission of building the European greenest battery to enable the European transition into renewable energy, said Northvolt CEO Peter Carlsson in the statement.
The Skelleftea manufacturing plant will be the company's first large-scale manufacturing facility in which a batch of cells will churn out by the end of this year.
Northvolt currently has contract worth about $27 billion with customers including Volkswagen, BMW and Scania, which are planning to purchase its batteries according to the ATP.
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