SHARE
COPY LINK

BUSINESS

Northvolt hails ‘milestone’ after producing its first battery cell in northern Sweden

Swedish battery firm Northvolt has produced its first lithium-ion battery cell just days before the end of the year.

Northvolt hails 'milestone' after producing its first battery cell in northern Sweden
Northvolt's first lithium-ion battery cell at its Swedish gigafactory. Photo: Northvolt/via TT

Intended to compete with the United States’ Tesla and Asian producers of lithium-ion batteries for electric vehicles, the factory located in Skellefteå in northern Sweden assembled its first electric cell “last night”, Northvolt said in a statement.

Once at full capacity, the site is expected to produce enough batteries to power one million electric vehicles annually, with an annual production capacity of 60 gigawatt hours (GWh), according to the firm.

“Today is a great milestone for Northvolt which the team has worked very hard to achieve. Of course, this first cell is only the beginning. Over the course of the coming years, we look forward to Northvolt Ett expanding its production capacity greatly to enable the European transition to clean energy,” Northvolt said.

Tesla is due to launch its first factory in Europe shortly and Asian rivals have significant operations in Poland and Hungary — but no European firm has yet operated a significant facility until now.

Northvolt, one of Europe’s leading battery hopefuls, has already secured $30 billion (26.5 billion euros) worth of orders from European car giants including Germany’s BMW and Volkswagen, and Sweden’s Volvo, with which it plans a second European factory.

The new factory, dubbed “Northvolt Ett” (Northvolt One) in Swedish, already employs 500 people and will likely employ as many as 3,000 once it reaches full capacity.

The Swedish company, which has already raised funding of several billion euros, was founded in 2016 by Swede Peter Carlsson and Italian Paolo Cerruti, both former Tesla employees.

Its known shareholders include Volkswagen, Goldman Sachs, BMW, Nordic funds and, since 2020, the founder of Spotify, Swedish billionaire Daniel Ek.

In addition to private funding, Northvolt has also benefited from European loans, as the region plays catch-up in its electric vehicle production capacity.

Faced with China, which dominates the market, Europe accounted for just three percent of world battery cell production in 2020, but aims to corner 25 percent of the market by the end of the decade, with several factory openings planned.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

MONEY

NEW FORECAST: What’s next for the Swedish economy in 2024?

Sweden’s economic downturn will bottom out in 2024 and the key interest rate will be lowered four times this year, according to a new forecast by Sweden’s National Institute of Economic Research (NIER).

NEW FORECAST: What's next for the Swedish economy in 2024?

Sweden’s GDP will grow by 0.8 percent this year before rising to 2.5 percent next year, according to the new forecast. However, unemployment will continue to rise, hitting 8.3 percent this year, before dropping in 2025.

The institute’s core measure of inflation, CPIF, which strips out the effect of interest rate rises, fell to 2.5 percent in February. The institute expects that it will continue to drop throughout 2024, reaching 1.2 percent by the end of the year, far below the Riksbank’s 2 percent target.

“Inflation has fallen quickly and will continue to fall throughout 2024,” NIER’s head of forecasting, Ylva Hedén Westerdahl, told a press conference. “We’ve reached a stable price level and prices are going to increase at a more normal rate from now on.” 

The institute expects the Riksbank, Sweden’s central bank, to start cutting its key interest rate – currently at 4 percent – from June, with four total decreases throughout the year, reaching 3 percent by the end of 2024 and 2.25 percent by the end of 2025.

This, along with lower interest rates, increased consumption and a rise to real wages is expected to speed economic recovery.

“The biggest risk for this forecast would be if [interest rates don’t go down], and central banks are forced to make a U-turn and keep their rates high,” Hedén Westerdahl said.

GDP fell slightly in the final quarter of last year, but is expected to rise in the first quarter of 2024. Despite this, growth will not be strong enough for the economy to start to recover until the end of the year and the country will remain in a period of low growth until 2026, the institute predicts.

Consumers have also become less pessimistic about their own finances and more positive about the future, partly due to inflation nearing the Riksbank’s 2 percent target rate.

Swedish exports are expected to start to grow again in the second quarter of this year, albeit slowly, due to weak demand from abroad – the Eurozone in particular, where growth has been weak, as well as the US, where GDP growth is expected to slow throughout the year.

Joining Nato may also have an impact on Sweden’s economy, as increased defence spending means faster growth in central government consumption throughout this year and into 2025. Local governments, on the other hand, have weak finances and will need to make cutbacks in some areas, leading to comparatively weak consumption growth in both years, and a public finance deficit next year.

SHOW COMMENTS