To seize the potential of the electric vehicle and energy storage sectors, two former Tesla executives plan to build Europe's largest lithium-ion battery factory in one of the Nordic countries -- a factory with annual battery production capacity of 32 gigawatt hours that could start first production by the end of 2020.
Sweden-based company Northvolt AB-as SGF Energy AB rebranded itself as of Tuesday-said that it is in the process of selecting the site in one of the Nordic countries in Europe, with hopes of nailing down a specific location sometime around the middle of this year.
The future production site will need an investment of US$4.225 billion (4 billion euro) over a period of six years. Northvolt has plans to begin construction in the second half of 2018, and to start manufacturing by the end of 2020.
"We foresee a major deficit of lithium ion batteries within a few years, with limited current and planned capacity in place in Europe. There is a market window open. We have a solid business plan in place that enables us to produce high quality batteries at an affordable cost", Northvolt CEO Peter Carlsson - a former VP supply chain at Tesla Motors - said in the statement. Related: Where Is Tesla's Model 3 Beta Prototype?
"The project resonates commercially, since the demand from automotive and energy storage sectors will be huge," Northvolt COO Paolo Cerruti-who held senior executive roles at Tesla for five years-added.
"Compared with Asia and the US, Europe is behind in the battery industrialization," Cerruti noted in Northvolt's press release.
Speaking to the Financial Times, Cerruti said: "We are not positioning ourselves at all against Tesla."
Carlsson, for his part, told FT:
"If nobody does anything, Europe is going to be completely dependent on an Asian supply chain. Europe has the opportunity to act for its own energy independence. It's now or never."
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
Comments
At steady state, a 32 GWh battery Gigafactory will offset demand for about 320k barrels per day of oil. Yep, we need about 10 TWh of capacity to virtually eliminate crude from the energy market. So this may seem like a small step, but over the next 30 years this one plant could replace about 3.5 billion barrels of oil.
So if taken as a reserve estimate, 3.5 billion is not a bad little discovery for Europe. Moreover, $1.21/b is a pretty low cost of discovery.