Battery cell maker Northvolt has begun building in Sweden what will be Europe’s largest lithium-ion battery cell factory, as it received the environmental permit for phase one earlier this week.
The company aims to reduce reliance on batteries from China and South Korea as European carmakers come under increasing pressure hurry up and catch onto the ongoing electric vehicles (EVs) boom.
Batteries are the biggest single cost of an EV and companies such as VW have called for the creation of a European supplier to compete with dominant Asian players such as Panasonic, LG Chem and China’s CATL.
Former Tesla executive Peter Carlsson, co-founder and chief executive of Northvolt, wants the northern Sweden factory to rival the scale of the US electric carmaker’s Gigafactory in the Nevada desert, targeting annual cell production equivalent to 32 gigawatt-hours by 2023.
The first section of the factory, in Skellefteå in the north of Sweden, is expected to start production in late 2020, generating eight gigawatt cell capacity per year.
“Northvolt has initiated a process to support the funding required for investments in buildings, materials and equipment that will take place in the next phase until the first part of the factory is completed,” Carlsson said in the statement.
The company says the factory will produce the world’s greenest battery, “with a minimal carbon footprint and the highest ambitions for recycling, to enable and accelerate the European transition to renewable energy.”
In April, Northvolt broke ground on the construction of a research facility used to develop, test and industrialize lithium-ion battery cells before large-scale production. That centre will start operations next year.
Companies like Siemens and Swiss rival ABB have already invested in the project and offered their digital enterprise technologies to help build the factory.