Swedish battery developer and manufacturer Northvolt has decided to strategically reprioritize the production of cylindrical battery cells in its future factory in Heide, Germany.

The decision also means that the construction of Northvolt’s battery factory in Borlänge will be postponed for at least two years. Despite this delay, Northvolt remains dedicated to generating 1,000 job opportunities, although it will employ a different strategy to achieve this goal.

Northvolt had initially planned to manufacture active cathode material for batteries and battery cells in its Borlänge factory. However, after analyzing the project, the company has determined that the investment required for the project is too significant compared to the amount of production achievable at the plant.

Northvolt’s Expansion Strategies

Northvolt, founded in 2016 by ex-Tesla VP Peter Carlsson, aspires to create the world’s greenest battery. The startup has a valuation of $12 billion and is backed by investors such as Baillie Gifford, Goldman Sachs, Spotify’s co-founder Daniel Ek, and VC Norrsken.

Northvolt’s batteries are primarily employed in electric vehicles, with some of its key clients being Volkswagen, BMW, and Scania.

Last month, Northvolt announced that it would continue with its intentions to construct the following factory in northern Germany. This decision came after the federal government committed to providing substantial state funding of hundreds of millions of euros for the project.

According to economy minister Robert Habeck, Germany can anticipate the emergence of a major flagship project in the energy and transport revolution. This project is expected to generate thousands of jobs in the green technology sector.

“Backed by this commitment of the federal government, Northvolt has decided to take the next steps towards our expansion in Heide,” Carlsson said.

Per the report by The Financial Times, the newly planned factory is anticipated to have an annual battery production capacity of 60 gigawatt-hours. These high-quality battery cells are expected to cater to approximately one million electric vehicles.

The ministry also said that the factory would directly employ 3,000 people and create employment opportunities for several thousand more in the surrounding industry and service sector.

Northvolt has production facilities in Skellefteå, Sweden, Gdańsk, Poland, and a development center in Västerås. The company also intends to expand its presence by establishing operations in Canada or the U.S.

According to CNBC, Northvolt has been reassessing its investment choices in response to the U.S. Inflation Reduction Act or IRA. This significant legislation offers green subsidies to businesses and carries a value exceeding $300 billion.


Northvolt AB is a Swedish battery developer and manufacturer, specialising in lithium-ion technology for electric vehicles. (wikipedia)