Northvolt powers ahead with €364M investment boost from IMCO

Swedish battery developer and manufacturer Northvolt has secured a $400 million or approximately €364 million investment from the Investment Management Corporation of Ontario or IMCO.

This funding will facilitate Northvolt’s global expansion plans. It also aligns with IMCO’s commitment to fostering a sustainable battery supply chain.

The fund is investing in Northvolt through convertible notes. IMCO head of infrastructure Matthew Mendes said this allows the fund to convert into equity at predefined milestones, offering downside protection.

Northvolt’s potential Montreal plant

Sources suggest Northvolt is in talks to build a multibillion-dollar facility near Montreal with the Canadian and Quebec governments. The proposed plant could include a cathode factory, a battery cell assembly line and a recycling facility.

The potential project might adopt a similar model to Volkswagen AG’s battery plant plan in Ontario, which has received substantial government support.

While these talks are underway, IMCO has yet to make any official comments regarding whether the Montreal factory is part of its investment plan.

Northvolt, based in Stockholm, was established seven years ago by two former Tesla Inc. executives, Peter Carlsson and Paolo Cerutti. Since then, the company has attracted investment from numerous backers, such as Goldman Sachs Group Inc. and Volkswagen.

The battery manufacturer has secured contracts worth over $55 billion or €50 billion and is building two additional European factories, one in Gothenburg, Sweden, and the other in northern Germany.

Northvolt’s plan to expand its gigafactories aligns with its objective of achieving an annual production capacity of 150 GWh by 2030.

Northvolt’s objective is to manufacture batteries on a global scale using locally-sourced renewable energy.

The company plans to increase its use of recycled materials in its batteries to 50 percent by 2030. It expects the carbon footprint of its batteries to be 80 percent less than those produced using coal-fired power.