With Over $50 Billion in Contracts, Northvolt to Transform a Former Paper Mill in Sweden into a EV Battery Gigafactory

author: Eric Walz   

Northvolt will develop the Kvarnsveden paper mill site in Sweden into a manufacturing plant for active cathode materials and EV battery cell production.

Electric vehicle battery startup Northvolt and Finnish company Stora Enso, a leading provider of renewable paper products, announced the signing of a letter of intent to purchase a sprawling paper mill surrounding an industrial area in Borlänge, Sweden. 

Northvolt will develop the Kvarnsveden Mill site, which is owned by Stora Enso, into a manufacturing plant for active cathode material and battery cell production. To align with its sustainability goals, the company will be reusing and refurbishing much of the existing facilities and site infrastructure for its new life for active battery materials manufacturing plant.

The gigafactory is expected to start the first part of its operations in late 2024 and will employ up to 1,000 people. In addition, Northvolt says the plant will utilize 100% clean energy from the region. 

Once renovations at the site are complete, it will have a potential annual production capacity of more than 100 GWh of cathode material, which will support battery cell assembly at multiple Northvolt facilities.

"Since Northvolt's founding, we have focused on circular battery production, but this is the first time we will reuse an entire production site," said Peter Carlsson, Co-Founder and CEO of Northvolt. "With its access to energy, industrial water and the broad production know-how in the region, Kvarnsveden is an optimal site for a gigafactory. We are thrilled to be able to open a new chapter in Borlänge's history as a global industrial hub." 

The former paper mill was founded in 1900 and produced pulp and paper for over 120 years until its closure in 2021. The plant's owner, Stora Enso, was seeking to find the best long-term solution for its former employees of the plant, as well as the city of Borlänge. The factory includes a direct rail link to Gothenburg harbor. 

Northvolt was co-founded in 2016 as "SGF Energy" by former Tesla executives, Carlsson and Paolo Cerruti. In 2017, the company officially changed its name to Northvolt with Carlsson serving as CEO. 

The company's mission is to deliver the world's greenest lithium-ion battery and establish a sustainable supply of batteries "to enable the decarbonization of society." 

While working at Tesla, Carlsson was Global Head of Sourcing & Supply Chain from 2011 to 2015 and worked alongside Tesla CEO Elon Musk for over four years. He also helped launch the Model S and managed Tesla's supply chain, which included over 300 suppliers at the time. 

Cerruti joined the company in 2016 after serving as VP of Global Supply Chain & Operations Planning at Tesla from March 2012 to Feb 2016. He currently serves as Northvolt's Chief Operating Officer.

In June 2021, Northvolt announced the signing of a $2.75 billion private placement to finance further battery cell production capacity and R&D efforts to meet the increasing demand from its automotive customers, which includes Volkswagen AG, BMW and Polestar. In total, Northvolt says its has more than $50 billion in battery orders from its automotive customers.

"There is a massive global demand for sustainable, high-quality lithium-ion battery cells and systems. With the blueprint developed at Northvolt Labs and Northvolt Ett, we will now put in another gear to scale up production even faster and larger than before," says Carlsson.

Earlier this month, Volvo Cars and Northvolt announced they are establishing a new battery manufacturing plant in Gothenburg, Sweden, which will start producing EV batteries in 2025. It's part of an investment of approximately SEK 30 billion (US$3.2 billion). Construction of the plant will begin next year. 

Once completed, the battery cell joint venture between Northvolt and Volvo Cars will be one of the largest EV battery cell factories in Europe. The plant will have an annual cell production capacity of up to 50 gigawatt hours (GWh), which is enough batteries to supply roughly half a million cars per year, according to Northvolt. The factory will produce state-of-the-art battery cells specifically developed for use in next-generation Volvo and Polestar electric vehicles.

The location in Gothenburg was specifically chosen by the two companies, as it offers a direct supply route into Volvo Cars' largest automotive factory in Sweden, as well as its proximity to Northvolt's R&D centers.

Volvo Cars and Northvolt have appointed former Tesla executive Adrian Clarke to lead the new joint venture.

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.