Northvolt factory

Tesla rival Northvolt has received a big boost to its bid to bring a “Gigafactory”-like battery plant to Europe. On Monday, the European Union’s investment bank approved a €52.5 million loan — or about $62.9 million — for the construction of a demonstration line in the months ahead. It’s the first step towards building the largest lithium-ion battery factory in Europe.

“Europe is moving rapidly towards electrification,” says Peter Carlsson, CEO of Northvolt. “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.”

If anyone knows how to beat Tesla, it’s Carlsson. The man that founded Northvolt in 2016 spent five years serving as chief purchasing officer for Tesla, working closely with Elon Musk. In that time, he only had one performance review with the tech entrepreneur, and all Musk could think of for how he could improve was “talk faster.”

Northvolt has big plans to take on Tesla’s Gigafactory, the under-construction plant in the Nevada desert set to produce 35 gigawatt-hours of batteries per year when it’s complete. Northvolt’s operations will be situated in Skellefteå, Sweden, and it’s set to start construction later this year. When complete in 2023, the factory will produce 32 gigawatt-hours of storage per year and employ between 2,000 and 2,500 people.

Northvolt’s demonstration plant will help reach this goal. The plant, which will be situated in Västerås, Sweden, will employ between 300 and 400 people to show the company is capable of reaching its future potential.

Watch Northvolt’s factory plans demonstrated here:

The Northvolt loan is seen by EU officials as a key step in improving renewable production in the union. The battery market in Europe is predicted to be worth €250 billion ($308.9 billion) in 2025, and European companies currently account for 40 percent of all renewable technology patents. However, Europe lags behind in actually manufacturing batteries, with the Gigafactory and the developing 50 gigawatt-hour CATL plant in China accounting for the major sources of output.

It may not be long before Northvolt loses its claim to “largest European battery factory,” though. Tesla plans three more Gigafactories, one of which will be situated in Europe. The company has faced teething problems with the Nevada factory, currently struggling to move through Tesla Model 3 “production hell” and improve manufacturing rates. With the investment and previous experience behind it, though, Tesla could give Northvolt a serious run for its money.

Photos via Northvolt