Northvolt Secures $3.4 Billion Funding to Accelerate European Secondary Battery Production

Sweden's Northvolt, Europe's largest secondary battery manufacturer, has reportedly raised about $3.4 billion (approximately 4.5 trillion KRW) from the European Union (EU) and global investment banks (IB) including JP Morgan Chase, according to the Wall Street Journal (WSJ) on the 16th (local time). WSJ described it as "the largest deal made by a clean energy company in recent years."

With Northvolt now able to manage the funds necessary to produce secondary batteries in Europe, the production of European-made secondary batteries is expected to accelerate.

According to WSJ, Northvolt plans to initially use these funds to expand the secondary battery production facilities at its northern plant located in its home country. This is to meet the demand from European clients such as Volkswagen and BMW, which are transitioning to electric vehicles. The order volume for secondary batteries from major European automakers amounts to about $55 billion. Additionally, Northvolt intends to use the new funds to increase the scale of dedicated facilities that convert used batteries into raw materials.

In the secondary battery sector, the United States and China, which regard the eco-friendly industry as a national new growth engine, are rapidly advancing. China controls every part of the secondary battery supply chain, from metal processing to cell assembly. The United States, following the implementation of the Inflation Reduction Act (IRA) last year, provides subsidies to secondary battery companies producing products domestically, thereby attracting foreign companies.

For the EU, which had been concerned about potential disruptions in the battery supply chain or technology leakage, Northvolt's investment in production within Europe is naturally welcome. On the 8th, the EU approved Germany's plan to provide subsidies worth $1 billion to support Northvolt's new battery factory construction. This follows the EU's introduction in March last year of the "matching subsidy system," which provides the same amount of subsidies to eco-friendly companies as those they receive from countries outside the EU.

Love calls for Northvolt continue. The Canadian and Quebec governments have also provided about $2 billion in subsidies to attract Northvolt's battery factory. WSJ estimates that Northvolt is managing a total of $13 billion backed by these investments. WSJ reported, "Wall Street is eagerly anticipating when Northvolt will pursue a public listing."

This content was produced with the assistance of AI translation services.