Save for later Print Download Share LinkedIn Twitter Swedish lithium-ion battery maker Northvolt has raised $2.75 billion of equity capital in a private placement to help expand its manufacturing capacity as it grows to meet the needs of core customers including automakers Volkswagen and BMW. Sales of electric vehicles (EVs) are growing rapidly in Europe. Battery EVs accounted for 5.4% of passenger car sales in the EU-27 last year. Industry professionals expect a VW Golf-sized EV to be cheaper to own and run in Europe than a conventional petroleum fueled vehicle by 2025 (IOD Apr.29'21). Many EU countries and the UK have adopted laws that require the phase-out of new gasoline and diesel-powered cars, starting from 2030 (IOD Nov.18'20). Northvolt plans to build up to three big batter factories in Europe. One should start operating in Sweden this year and one is also planned in Germany to meet the growing backlog of orders for lithium-ion batteries, which has grown to $27 billion. All if Northvolt's planned factories will be powered by renewable energy. The batteries will be used in electric passenger vehicles and trucks. Volkswagen's investment of roughly $620 million keeps its ownership stake in Northvolt at roughly 20%. Funds in this latest financing round came from Northvolt's existing shareholders, pension funds and financial institutions including Goldman Sachs. Northvolt intends to have an annual production capacity of more than 150 gigawatt hours in Europe by 2030. Volkswagen placed a $14 billion order with Northvolt earlier this year. It expects 70% of its vehicle sales in Europe to be electric by 2030, and levels of more than 50% in China and the US.