In BriefTesla competitor Northvolt was just approved for a $62.9 million loan to begin construction on a Gigafactory-like battery factory in Sweden. If all goes as planned, it'll be the largest lithium-ion battery factory in Europe upon completion in 2023.
Elon Musk isn’t one to shy away from competition. Just last week, he said he hoped SpaceX’s Falcon Heavy launch would lead to a new space race, and he’s previously encouraged traditional automakers to invest big in electric vehicles (EVs), Tesla’s market niche.
Now, a former employee is ready to challenge Musk’s current dominance in another space: battery manufacturing.
In June 2014, Tesla broke ground on its Gigafactory battery plant in Sparks, Nevada. When the massive factory is finished, the company expects it to produce 35 gigawatt-hours (GWh) of capacity every year, nearly doubling the entire world’s current battery production.
Peter Carlsson, CEO of Northvolt and a former chief purchasing officer for Tesla, wants to build his own Gigafactory-like plant in Europe, and Monday, February 12, the European Union’s investment bank approved a €52.5 million ($62.9 million) loan that will fund the construction of a demonstration line in Västerås, Sweden.
If all goes well, Northvolt’s goal is to complete construction on the factory in 2023, at which point it will be able to produce 32 gigawatt-hours of storage per year, making it the largest lithium-ion battery factory in Europe.
A Battery-Powered World
The world will need to transition away from fossil fuels and toward renewable sources of energy to have any hope of combatting the effects of climate change. Meeting battery demand is an essential part of that process, but right now, Europe isn’t keeping up with Tesla and Asian manufacturers in terms of battery production.
Northvolt’s factory could provide the continent with a local source of batteries while also driving down global costs. Currently, batteries account for 30 to 50 percent of the price of an EV, but if more competitors enter the space, that figure could drop dramatically, helping speed up EV adoption. Cheaper batteries could also encourage more people to switch to renewables to power their homes.
Carlsson will need to move quick if he want to establish a foothold in Europe, though. Musk already has plans to build as many as five more Gigafactories, including at least one in Europe, and there’s a reason Tesla’s CEO isn’t afraid of a little competition: he wins more often than not.