Battery manufacturer Northvolt announced a new $2.75 billion round of investments to help add 60 GWh of production capacity. Volkswagen is contributing another $620 million in the round.

Northvolt is a battery startup founded by two former Tesla executives who worked on Tesla’s Gigafactory 1 in Nevada with Panasonic.

The Swedish startup received investments from several companies, including Volkswagen, to build a massive battery factory in Sweden.

Volkswagen’s investment also came with the option to create a 50/50 joint venture with the startup to build another battery factory to supply the automaker.

Northvolt is becoming a key partner for Volkswagen to secure battery supply long-term in order to enable its electric transition, and the automaker ordered $14 billion worth of batteries from them earlier this year.

Today, Northvolt announced a new $2.75 round of private investments:

Northvolt today announced the signing of a $2.75 billion private placement to finance further battery cell production capacity and R&D efforts in order to meet the increasing demand of customers engaged in the transition to decarbonized, electric solutions.

With that money, they now have raised over $6 billion, which they think is going to be enough to deploy over 150 GWh of annual battery production capacity.

The new money is also going to be used to expand production capacity at Northvolt Ett Gigafactory:

Northvolt’s first gigafactory, Northvolt Ett, in Skellefteå, Sweden, will be expanded from the earlier plan of 40 GWh to 60 GWh of annual production capacity in order to meet the increased demand from key customers, including a $14 billion order from Volkswagen announced earlier this year. The factory will commence production later this year.

Volkswagen confirmed that it participated in the new round of investments – maintaining its 20% stake in the company:

Volkswagen is participating, with a contribution of US$620 million (about €500 million), in a financing round of its Swedish battery partner Northvolt AB with a total volume of US$2.75 billion. The Group will thus maintain its stake in the company constant at about 20%. The funds are to be used for capacity expansion in the fields of production, recycling and research and development. Among other activities, Northvolt intends to expand the capacity of its Northvolt Ett gigafactory in Skellefteå, Northern Sweden from 40 GWh to 60 GWh per year, in order to meet higher demand from customers.

Northvolt’s first factory is excepted to start production in 2021.

Its second factory, Northvolt Zwei, which will now be owned by VW, is currently in the permitting phase and should come online in 2024.

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