The European Investment Bank (EIB) has recently approved a loan that will help a Swedish company build an innovative battery factory.

€52.5 million ($68 million) was approved by the bank this month to help get the project off the ground; construction is expected in the next few months in the city of Västerås in central Sweden.

The company behind the project, Northvolt, was only established in 2016 as the brainchild of former Tesla employee Peter Carlsson. Now the CEO, he sees a strong future for the technology: “Europe is moving rapidly towards electrification. Northvolt’s objective is to build the world’s greenest battery to enable the transition. With the support from the European Investment Bank and the European Union, we are now one step closer to establishing a competitive European battery manufacturing value chain", he said.

It is expected that the site will employ up to 400 people and also include a research facility. This demonstration plant will lead to the construction of a larger-scale lithium ion factory elsewhere in the country, which could produce 32 gigawatt hours (GWh) of battery capacity each year. This would be the largest battery factory in Europe, able to power hundreds of thousands of electric vehicles and provide crucial low-carbon energy storage.

Tesla has already partially opened its own ‘Gigafactory’ in the US, which aims to produce 35 GWh of capacity. It also has plans to open similar factories, including one in Europe. China is also moving ahead with a huge number of smaller factories which could produce four times this amount.

Ambroise Fayolle, vice-president of the EIB, said that the investment will help Europe compete in this increasingly global market: "With the growing momentum of clean energy and electric mobility, batteries will become ever more important. Europe is currently lagging behind when it comes to battery manufacturing and this highly innovative and strategic project deserves European backing to fill that gap".

Vice President of the European Commission in charge of the Energy Union Maroš Šefčovič also stressed the need for Europe to make advancements in the battery market, or face being left behind: "Batteries are a strategic component of our competitiveness and to capture a new European market worth €250 billion annually as of 2025, we need to act fast”

“It is important to pool all available instruments at the national and European level”, he added.

Photo: Northvolt