Northvolt gets $1.2B in fresh funding to widen outreach in North America

Stockholm-based lithium-ion battery maker Northvolt has obtained $1.2 billion (approximately €1.1 billion) in its latest financing round to fund its expansion in the North American market.

The new funding came amid demand for a speedy transition toward a low-carbon economy supported by new green policies in North America. Northvolt chief financial officer Alexander Hartman asserted the importance of capital in the industry.

“It’s a very capital intensive industry… finding the right mix is always hard in this new greenfield kind of transitional projects,” said Hartman, as quoted by Reuters.

American investment firm BlackRock led the recent funding round with several Canadian pension plans, such as the Ontario Municipal Employees Retirement System. Other world-class investors like Goldman Sachs and Volkswagen also took part in the financing.

BlackRock global head of climate infrastructure David Giordano noted that the battery manufacturing sector had an “attractive growth potential” as more people adopted electric vehicles and battery storage.

“As a leading investor in the energy transition, we look forward to supporting their continued growth,” said Giordano.

With the new funding, Northvolt plans to establish more factories across Europe and North America. In May, the battery producer announced a €600 million investment to build a manufacturing facility called Northvolt Drei in Germany. Sources said that Northvolt would establish a multibillion-dollar battery factory in Canada.

Public listing plan

Investors provided fresh funding through a convertible note, with some classified as “dark green” funds under the EU’s sustainable finance framework. According to Hartman, this classification will serve the company’s future interests when it launches an initial public offering (IPO).

Earlier this year, sources reported that Northvolt was exploring the possibility of listing its shares in Europe or New York. While the plan was tentative, a Northvolt spokesperson described an IPO as a “natural” development for the growing company. The listing is expected to bring the company’s total valuation to more than $20 billion (€18.51 billion).

With the latest financing round, Northvolt has raised over $9 billion (€8.33 billion) since 2017. The firm has secured orders of over $55 billion (€50.89 billion) from global customers, including BMW, Scania and Volvo Cars.