Former Tesla employees have built the biggest european battery factory in Skelleftea in the north of Sweden, a report by french newspaper Le Monde:
A decade ago, the future looked bleak in Skelleftea. In the town of 71,500 inhabitants, the size of Corsica, 800 kilometers north of the capital, Stockholm, most mines had closed. Those that still produced minerals had replaced men with machines. In search of a brighter future, the young people headed south. In a burst, in 2015, the municipality set itself the goal of reaching 80,000 inhabitants by 2030. "But we knew it would be very hard," admits today the director of municipal services, Kristina Sundin Jonsson.
This was without counting the miracle that occurred in the fall of 2017, when the company Northvolt, created two years earlier in Stockholm, chose Skelleftea, among 40 Swedish municipalities, to set up its “gigafactory” of electric batteries. At first, the locals only half believed it. The hill above the construction site in the east of the city has been renamed "the hill of the skeptics". Locals have gotten into the habit of climbing up to follow the progress of the work. First, we had to cut down trees over an area the size of 280 football pitches, then level the pitch with explosives. On October 15, 2019, construction of the buildings could finally begin.
This was without counting the miracle that occurred in the fall of 2017, when the company Northvolt, created two years earlier in Stockholm, chose Skelleftea, among 40 Swedish municipalities, to set up its “gigafactory” of electric batteries. At first, the locals only half believed it. The hill above the construction site in the east of the city has been renamed "the hill of the skeptics". Locals have gotten into the habit of climbing up to follow the progress of the work. First, we had to cut down trees over an area the size of 280 football pitches, then level the pitch with explosives. On October 15, 2019, construction of the buildings could finally begin.
Two years later, the first battery cells, the size of a VHS tape, will be able to come out of the factory. Northvolt announced in a press release on Wednesday, December 29, 2021, that it had assembled its first electric battery cell "last night". First, the Swedish group will produce 16 gigawatt hours (GWh) per year, enough to equip 300,000 electric vehicles each year. In 2023, the storage capacity will double, reaching, in a few years, 60 GWh, i.e. the possibility of equipping one million electric vehicles each year, making Northvolt1 the largest electric battery factory in Europe, whose list of customers include Volkswagen, BMW, Scania or Volvo Cars.
Fredrik Hedlund, vice-president of Northvolt, ensures the visit. This former strategy director at Sony Mobile, a native of southern Sweden, landed in Skelleftea in June, with his wife and the youngest of their three children. For a year and a half, he oversaw the construction of Volkswagen's battery plant in Salzgitter, south of Hanover, launched as part of a partnership with Northvolt in 2019. In the spring, the Swedish resold its shares to the German manufacturer, which is also one of its main shareholders.
Fredrik Hedlund was recruited in the spring of 2017. The 50-year-old says he didn't hesitate when Peter Carlsson, one of the company's two co-founders, called him. "The enormity of the project" as well as "the possibility of participating in a transformation which will have a major impact on the world" and "the birth of a new industry in Sweden" immediately appealed to him. A speech given by all the employees of the company with whom Le Monde was able to speak.
On the construction site, covered with a thick layer of snow, workers were bustling about beside the gigantic gray buildings. As night falls at barely 2:30 p.m., their neon yellow jackets glow in the dark. At the start of December 2021, 2,900 people were working on the site, including 500 Northvolt employees, who were no longer waiting for production to start. They will be six times more eventually, when the whole factory is finished. Today, over 100 nationalities are represented: engineers from Asia, Tesla alumni, but also chemical and petroleum industry specialists.
Black helmet on his head, Fredrik Hedlund shows a first block, 42 meters high: this is where the cathodes (the negative electrode) will be produced. “We have opted for a vertical integration model. Everything will be produced here. This allows us to control the value chain, in a phase where the global production of cells will grow very quickly, with the risk that certain materials will be insufficient. By buying metals rather than cathodes, our supply chain is much broader, "says the vice president of Northvolt.
The neighboring building - a block 350 meters long, 120 meters wide, and 27 meters high - houses the first production line. Behind, a second identical is under construction. Three more will follow, along with an adjoining recycling center, dubbed "Revolt". There was no question of taking pictures inside. We are barely allowed to peek out of a window that overlooks an enormous room, with white walls, where brand new ovens are waiting to be started. Like its main competitors, the Swede will produce lithium-ion batteries, based on nickel, manganese and cobalt.
Where do the raw materials come from? Paolo Cerruti, CEO and co-founder of Northvolt, refuses to reveal its provenance. “We don't want to provide our competitors with all the work we've done on supply chains on a plateau,” he says. Because the competition in the next few years promises to be fierce. In Europe alone, battery cell requirements could reach 400 GWh in 2025.
On December 14, 2021, Northvolt signed a partnership with the Portuguese oil group Galp Energia to build one of the first lithium refining plants in Europe in Portugal. An investment of 700 million euros, which should allow the production of up to 35,000 tonnes of lithium hydroxide per year from 2026, enough to power the batteries of around 700,000 electric vehicles. Half will be reserved for Northvolt. "It is crucial to extend the European value chain upstream, to include raw materials," argues Paolo Cerruti.
Where do the raw materials come from? Paolo Cerruti, CEO and co-founder of Northvolt, refuses to reveal its provenance. “We don't want to provide our competitors with all the work we've done on supply chains on a plateau,” he says. Because the competition in the next few years promises to be fierce. In Europe alone, battery cell requirements could reach 400 GWh in 2025.
On December 14, 2021, Northvolt signed a partnership with the Portuguese oil group Galp Energia to build one of the first lithium refining plants in Europe in Portugal. An investment of 700 million euros, which should allow the production of up to 35,000 tonnes of lithium hydroxide per year from 2026, enough to power the batteries of around 700,000 electric vehicles. Half will be reserved for Northvolt. "It is crucial to extend the European value chain upstream, to include raw materials," argues Paolo Cerruti.
Jeans and black hoodie on a white T-shirt, in socks (the snow-soaked shoes remain on the doormat, at the entrance to the barracks), the Italian tells, in perfect French, his journey: a childhood in Turin, two years of study in Paris, fourteen years at Renault-Nissan (including several in Japan and India), then four with Tesla, as vice-president in charge of global supply chain and planning of operations.
“Difficult”, but “formative” years. Paolo Cerruti is on the front line when Tesla decides to build its first gigafactory in Nevada (United States). It was in 2013, the American manufacturer launched the marketing of its Model S. “To increase in volume, we had to produce 500,000 cars per year. When we looked at what it looked like in batteries, we realized that this was the global production for the year 2013. That's how the idea of the gigafactory was born. "
In 2016, Paolo Cerruti had just left Tesla when Peter Carlsson contacted him. Born in Södertälje, the birthplace of the Swedish manufacturer Scania, whose father was an employee, this 51-year-old entrepreneur, graduated in economics, worked at the Swedish equipment manufacturer Ericsson, then Sony Ericsson (still in Sweden) and NXP Semiconductors in Singapore , before joining Tesla in 2011, as purchasing and logistics manager, where he remained until 2015. In Sweden, a group of investors asked him to work on the opportunity to build a battery factory in the north of the 'Europe. Peter Carlsson recruits Paolo Cerruti.
Thanks to their business cards, the two men have no trouble securing meetings with the CEOs of major European manufacturers. They realize that these "have only an extremely superficial idea of the complexity" of the subject, be it "in terms of costs, the depth of the supply chain, or the concentration of skills, always. in South Korea and Japan, but also increasingly in China, ”says Paolo Cerruti. They decide to go for it.
The first fundraising took place in January 2017: $ 12 million (10.6 million euros). The rounds follow one another. In June 2019, Northvolt won a billion dollars, from Goldman Sachs, Volkswagen, BMW and several Nordic funds, then an additional 2.75 billion in June 2021. In the process, the Swedish signed a partnership with the manufacturer Volvo, a subsidiary of Chinese Geely, to build a battery factory in Europe and a research center in Sweden.
The European Investment Bank has also advanced 350 million euros to build the Skelleftea plant. Paolo Cerruti observes a change in attitude in Europe, where the Covid-19 pandemic has further exacerbated the need for control of value chains. He regrets, however, the lack of mobilization of the European Union vis-à-vis China, "which has done fieldwork throughout Central and West Africa, and succeeded in taking control of a good deal of access to raw materials ”.
Produce the greenest battery
In the raw materials race, Northvolt scored an important victory in mid-November, producing its first cell from 100% recycled cobalt, nickel and manganese. A feat achieved in his laboratory in Västeras, 100 kilometers north-west of Stockholm, located next to the company's rapidly expanding research and development center: a miniature giga-factory, where Northvolt developed all its production processes and develops cell prototypes with its customers.
Emma Nehrenheim, environmental manager and leader of the Revolt recycling project, recalls the initial objective: to produce the greenest battery in the world. This is why this environmental technology professor at ABB joined the Northvolt co-founders in May 2017 - she is "Number 26". Its mission: to reduce the ecological footprint of a battery cell, currently between 100 and 150 kg of CO2 per kilowatt hour, to reach 10 kg in 2030.
"Having access to renewable energy, as is the case in northern Sweden, with hydropower, is fundamental," says Nehrenheim. Northvolt1's electricity consumption is expected to reach 2 terawatt hours, or nearly 1.5% of Swedish production. "But we also look at the entire life cycle of the cell, our suppliers, the ecosystem where our factories are located, the impact on water and the use of waste," adds the environment manager. Up to 95% can be recycled. What cannot be reused directly by Northvolt will be supplied to partners, such as Norway's Norsk Hydro, who will take the aluminum from the case.
In Skelleftea, the director of municipal services, Kristina Sundin Jonsson, has a smile: the municipality expects 7,500 new jobs in the next few years, in addition to the 2,500 of Northvolt1. The real estate market is in full swing and forecasts count on 90,000 inhabitants by 2030. In order to support the rush towards the Far North, Stockholm has appointed a national coordinator.
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