Can Northvolt resolve Europe’s impending electrical automotive battery drawback?

Within the coronary heart of Swedish Lapland, slightly below the Arctic Circle, a former Tesla supervisor is constructing a battery manufacturing facility so massive it might fill 100 soccer pitches and produce sufficient energy to mild 6bn mild bulbs a 12 months.

The mammoth endeavor by Northvolt — which has just raised $2.75bn at an $11.75bn valuation to carry this manufacturing facility in Skellefteå and different factories elsewhere in Europe to life — is the good hope of not simply of the corporate, but in addition the complete European automotive trade.

Founder Peter Carlsson, beforehand head of provide chain at Tesla, says Northvolt’s operations will be capable to provide an unlimited variety of batteries in a approach that’s extra ecofriendly than most, given its skill to recycle previous batteries. 

“The European automotive trade actually wished to discover a European champion,” he says.

“What is exclusive with the trail that we’ve got chosen, versus the place a lot of the trade has gone, is that relatively than utilizing a furnace to soften and recycle the nickel and cobalt, we’ve got gone [down] the hydrometallurgical path.”

Using this liquid processing method makes Northvolt one in every of a small number of companies on the planet that is ready to recycle lithium — the mineral that provides rechargeable batteries their superpowers.  “We’re fairly proud that our pilot amenities present [we’re] capable of recycle lithium to a excessive diploma,” Carlsson provides.

The startup makes lithium-ion batteries with 80% much less CO₂ emitted in comparison with equal choices available on the market, it says, and it has already struck $27bn price of offers with automotive firms together with Volvo, Volkswagen, BMW and Swedish truck producer Scania. 

In February, micromobility startup Tier introduced it was partnering with Northvolt to get 5k electrical scooters powered by Northvolt batteries on the street by the top of this 12 months.

Europe’s impending battery drawback

As the electrical car sector skyrockets, consultants have more and more turn out to be involved that the issue of oil-guzzling engines is quickly to get replaced with a brand new challenge: what to do with the thousands and thousands of lithium-ion batteries made to be put in these automobiles.

By 2030, analysts predict there might be round 145m EVs trundling alongside the world’s roads, up from simply 11m in 2020. In the meantime, micromobility options akin to scooters and electrical bikes — additionally powered by rechargeable batteries — are receiving huge amounts of investment from VCs.

Ailin Huang, Tier’s head of sustainability, says the seek for extra sustainable battery options is high of thoughts for electrical scooter firms — “as a result of if we don’t resolve these points, we’ll successfully find yourself with the identical challenge we’ve got with fossil fuels, however batteries.” 

She says Northvolt makes a compelling companion not essentially as a result of the batteries themselves are notably particular, however due to its proximity (Tier at the moment ships its batteries from Asia), and the best way it plans to mix each the manufacturing and recycling of batteries. 

“They’re build up their very own materials stream of secondary assets from recycled batteries,” she says. “They usually’re [hoping to] obtain economies of scale that different recycling firms in all probability gained’t be capable to.”

For EV makers, the R&D race has shifted from discovering batteries that may permit automobiles to journey so far as attainable to discovering extra sustainable options, says Sebastian Peck, managing director of InMotion Ventures, Jaguar Land Rover’s VC arm. “There’s an enormous leap individuals have made within the final 18 to 24 months, recognising that batteries are a legal responsibility,” he says.

There are three huge issues in relation to batteries. First, the supplies they’re made out of (the uncommon metallic cobalt, for instance, accounts for about 20% of the average lithium-ion battery); second, the inefficiency of the availability chain itself (transport lithium-ion batteries from China, the market-leading producer, for use in Europe has an unlimited environmental toll); and eventually, the energy-intensive nature of each battery manufacturing and recycling. 

Northvolt has solutions to many of those issues.

Its manufacturing facility in Northern Sweden runs on 100% renewable hydropower and it’s far nearer to its European prospects than the Chinese language or American firms they may in any other case work with. Plus, its use of hydrometallurgy (the place metals are separated utilizing water relatively than melting them down in furnaces) to extract the uncooked minerals of the batteries implies that 97% of the supplies — together with, crucially, the lithium — may be reused. 

Governments throughout Europe are additionally beneath stress to handle this impending energy drawback. A May report from EU-funded waste administration venture CEWASTE advisable that EU international locations put legal guidelines in place to require firms to recycle the vital metals of their merchandise, discovering that recycling charges for these supplies are at the moment “near zero”.

2024: A make-or-break 12 months for Northvolt

Northvolt is firmly in scaleup mode proper now, with a number of manufacturing websites at the moment beneath development. 

Its manufacturing facility in Skellefteå is a vastly formidable venture. The completed web site might be 500,000sqm in dimension — bigger than the previous city of Stockholm — with the capability to supply as much as 60 gigawatt hours of energy per 12 months. Carlsson places the price of development of this beast at “$100m per gigawatt hour”. This week, Northvolt introduced that it has signed a cope with Volvo to create a second gigafactory in Europe, with inexperienced power hubs like Finland and Norway reportedly on the cards.

“You want a reasonably sizeable space — these crops are fairly huge — and the power facet is fairly essential,” Carlsson says. “If you happen to have a look at the power mixes together with the place the client is, that’s Northern Europe.”

The areas of those factories poses one of many greatest challenges that Northvolt has coming its approach. How do you persuade the hundreds of individuals wanted to handle, function and optimise a excessive output gigafactory to relocate to simply exterior the Arctic Circle?

That is the query that at the moment retains Carlsson awake at night time, and he predicts that inside just a few years, “this trade goes to be challenged with a expertise scarcity.”

Within the run-up to its make-or-break 12 months — amongst different offers, from 2024 Northvolt has promised to ship 15 gigawatt hours of batteries per 12 months to Volvo, $2.3bn-worth to BMW, and kick off supply on a $14bn, 10-year contract with Volkswagen — the corporate must take into account issues far past its fast management, akin to whether or not or not there’s sufficient housing in Skellefteå, a small metropolis with a inhabitants of 32,775, for the 10k workers it hopes to usher in. 

“It each makes it thrilling — however typically makes it troublesome to sleep,” Carlsson says.

Sarah Drumm covers sustainability at Sifted, and heads up our new sustainability-focused publication Maintain. You can sign up here. She tweets from @sarah_drumm