A Nordic battery company, which counts two former Tesla executives as part of its team of experts, announced plans on Tuesday to build a Gigafactory-like battery plant in the Nordic countries in three years time. It’s an ambitious plan that would put them ahead of the electronic car giant as the need for lithium-ion batteries surges in near future.
The company, Northvolt, is planning to spend over €4 billion ($4.2 billion) over the next six years to construct Europe’s largest battery factory that will produce cells for a variety of sources. It wants to finalize a location this year.
Straight off the mark, Northvolt could face competition from Tesla for land space. Tesla already operates two Gigafactories, the first in Nevada and the second in New York, and it’s expected to finalize plans for its third, fourth, and fifth Gigafactory later this year. In November, CEO Elon Musk revealed an upcoming Gigafactory will be in Europe. Unlike Northvolt, though, Tesla has given little indication about when this Europe plant will go live, and it’s possible that Northvolt could beat them to the punch.
Northvolt’s plan is based around the idea that there is a forthcoming drought of lithium-ion batteries. When prices drop below $100 per kilowatt-hour, Northvolt believes demand will start to outstrip supply. Electric cars will make this drought particularly severe, as new vehicles will need large amounts of cells to beat range anxiety and move consumers away from gas-powered machines.
“We foresee a major deficit of lithium-ion batteries within a few years, with limited current and planned capacity in place in Europe,” Peter Carlsson, Northvolt CEO, said in a statement. “There is a market window open.”
Northvolt’s factory will be unique in that it will take inspiration from the semiconductor industry. Clients will be able to bring along specifications, and the factory will develop cells suited to the project in question. High-volume customers will be able to work with scientists to develop proprietary chemistries for their cells. Beyond these options, the company expects to produce two basic battery form factors, perfected over time.
The company’s plans are ambitious, and the proposed output rivals that of Tesla’s Nevada factory. The company wants to reach an annual production output of 32-gigawatt hours by 2023. Tesla is planning to complete its first Gigafactory by 2018, at which point its battery production is expected to have an output of 35-gigawatt hours.
The company has an ambitious timetable mapped out. By the middle of this year, it’s expected to decide on where the factory will by built. The chosen area will need between 500,000 to 700,000 meters square (between 5,381,955 and 7,534,737 square feet) of available space, around the same size as the first Gigafactory. The company is also looking for excellent connections to the power grid and complete industrial zoning permits secured. Then, in the second half of 2018, construction will begin, with an aim to start volume manufacturing by the end of 2020.
Watch the company’s introductory video here: