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How To Invest in Northvolt Stock or Northvolt IPO?

Cory Russell

May 18, 2022 17:53

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Electric cars and the lithium-ion batteries that power them have become important to the climate transition as the globe moves away from fossil fuels. Meet Northvolt, a Swedish lithium-ion battery company that intends to shift the manufacturing center of gravity from Asia to Europe, and see whether you can invest.

What exactly is Northvolt?

Northvolt is a lithium-ion battery manufacturer based in Sweden that aims to provide "the world's greenest batteries." The batteries will power electric automobiles, energy storage, and other applications. Although Northvolt's batteries do not use the same chemistry as Tesla's, the company claims that performance is improving.


Northvolt's value proposition is on sustainability. They use hydroelectric power and other renewables, which are plentiful in Sweden, to reduce the carbon impact of battery manufacture. According to the company, their batteries would have an 80 percent reduced carbon impact than those manufactured with coal. Furthermore, the batteries will be 95 percent recyclable, which is critical given the scarcity of battery metals.


Green batteries from Northvolt are more than just an idea, and they're already being manufactured. Northvolt is the first European company to produce batteries in a gigafactory, which they accomplished just before the year's conclusion. Customers should get their batteries in 2022, according to the business.


Carmakers are trying to get their hands on batteries as demand for electric vehicles grows. Supply restrictions caused by Covid and geopolitical issues with China underscore the necessity for batteries to be made abroad. In Asia, electric vehicle batteries are being made by firms such as CATL and BYD in China, Panasonic in Japan, LG, SK Group, and Samsung in South Korea.


Northvolt is attempting to establish a European battery company to compete with Asian producers. Northvolt's goals aren't limited to Europe; they may even spread to Asia and North America.


In 2016, Paolo Cerruti and Peter Carlsson, a former Tesla executive, started the startup in Stockholm, Sweden. Volkswagen, BMW, and Volvo are among the companies that support them. In 2019, Volkswagen purchased a 20% share in the firm. Northvolt has now received $50 billion in battery orders, which have come from automobile manufacturers, including $14 billion from Volkswagen.


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Northvolt's Manufacturing Facilities

Northvolt has three gigafactories planned in Europe thus far:

Ett. Northvolt Northvolt began assembling battery cells in their gigafactory in Skelleftea, Northern Sweden, by the end of 2021. Northvolt plans to increase yearly output to 60 GWh.


A second facility will be developed in Sweden on the site of a decommissioned paper mill. In 2024, operations should begin. Northvolt Drei will create 100 GWh of battery cathode material yearly when it reaches full capacity, thanks to renewable energy. The plant, powered by renewable energy in Germany, is estimated to manufacture 60 GWh of battery cells each year. Northvolt Drei will employ 3,000 employees and begin manufacturing batteries in 2025 if everything goes according to plan.

Volkswagen-Northvolt Collaboration

Volkswagen holds a 20% investment in Northvolt and has already placed $14 billion in ten-year contracts with the company. The two firms' collaboration was originally revealed in 2019. It revolves around Northvolt Ett, a gigafactory in northern Sweden that will satisfy the carmaker's requirements.

Northvolt-Volvo Collaboration

Volvo plans to convert its entire manufacturing to electrified vehicles by 2030. Volkswagen and Northvolt are working together on a gigafactory in Germany, with construction set to begin in 2023.


The partners anticipate the renewable-energy-powered facility to generate 50 GWh of battery cells each year.


Although Northvolt's operations have thus far been restricted to Europe, Volvo's worldwide reach may assist them in expanding into Asian and American markets.

Is Northvolt Open to the Public?

No, Northvolt is a privately held corporation that has raised $6.5 billion in capital. Volkswagen, BMW, Goldman Sachs Asset Management, Swedish pension funds, Baillie Gifford, and Spotify CEO Daniel Ek were among the investors that contributed $2.75 billion to Northvolt in June 2021. The corporation was allegedly valued at about $12 billion in its most recent financing round.

When is Northvolt Going Public?

Northvolt was considering going public in 2022 or 2023, according to Germany's Manager Magazin, with a stated worth of 20 to 30 billion euros. However, the corporation has made no formal statement regarding an IPO, so only time will tell.

How to Invest in Northvolt

You may acquire shares in private pre-IPO firms if you are an accredited investor.


Employee stock options may be purchased via pre-IPO investment platforms like EquityZen and Forge (SharesPost). On paper, startup workers may seem wealthy, but stock options make purchasing a home or paying for education difficult. The danger is that corporate personnel are always more knowledgeable about the firm than you are, and you have no way of knowing why they are selling.


Only accredited investors are permitted to participate in pre-IPO investments. To be considered an accredited investor, you must satisfy the following requirements:


Over the previous two years, you've earned $200,000 each year and intend to earn the same amount this year ($300,000 for couples). or


Have a net worth of more than $1 million (excluding your primary residence)


A Series 7, 65, or 82 license is required.


You may look at Northvolt's pre-IPO shares on EquityZen or Forge if you qualify. However, keep in mind that pre-IPO and startup investments are very hazardous. Although Northvolt has many supporters and pre-orders, the firm will most certainly be unprofitable for a long time, and its batteries aren't capable of powering today's electric vehicles.

News about Northvolt Stock.

Northvolt, Backed by Volkswagen and Goldman Sachs, Plans a German Gigafactory

Northvolt said that it plans to construct a gigafactory in Germany, with the first batteries expected to be manufactured in 2025.


The Stockholm-based battery manufacturer stated that the Northvolt Drei project would be situated in Heide, northern Germany, and would produce lithium-ion batteries for the European market.


The plant's "theoretical production capacity," according to Northvolt, is 60-gigawatt hours per year, which is "enough for around one million electric automobiles."


Northvolt Drei, which means "three" in German, will be the company's third gigafactory. Gigafactories are large-scale production facilities for electric car batteries. Elon Musk, the CEO of Tesla, is largely credited with coining the phrase.


Northvolt claims that the factory's location in Schleswig-Holstein will allow it to connect into the region's electricity infrastructure.


According to the report, the system is "marked by a surplus of electricity produced by onshore and offshore wind power, supplemented by renewable energy given via grid interconnections to Denmark and Norway," according to the report.


Northvolt was launched in 2016 and received funding from Goldman Sachs and Volkswagen companies.


"How we make a battery cell matters," Northvolt CEO Peter Carlsson remarked on Tuesday. "If you use coal in your manufacture, you'll get a lot of CO2 in your batteries," Carlsson said, "but we can produce a sustainable product if we utilize clean energy."


"We believe that new energy-intensive businesses, such as battery production, should be built near where clean energy is generated," says the company.


Northvolt isn't the only company considering building a gigafactory in Germany, an industrial and economic powerhouse with a competent workforce. For example, Tesla is building on its Gigafactory Berlin-Brandenburg.


VW, which said in December 2021 that it owned around 20% of Northvolt, aims to build several gigafactories in Europe, including one in the German state of Lower Saxony.


Ford also said that it had signed a non-binding agreement of understanding with SK On Co. of South Korea and Koç Holding of Turkey.


The MOU refers to forming a joint venture focusing on building a commercial electric vehicle battery factory near Ankara, Turkey's capital. If all goes according to plan, manufacturing at the facility might start by the middle of this decade.


According to Ford, the Turkish government supports the JV, which will have 30 to 45 gigawatt hours per year.


Efforts to build EV battery manufacturing facilities come when major economies are striving to lessen the environmental impact of road-based mobility by moving away from gasoline and diesel automobiles.


By 2035, the European Commission, the EU's executive arm, wants to reduce CO2 emissions from automobiles and vans by 100%. Turkey, where the Ford-backed battery plant will be built, is not a member of the European Union.


By 2030, the United Kingdom, which left the EU at the end of January 2020, plans to cease selling new diesel and gasoline vehicles and vans. By 2035, all new automobiles and vans will be required to have zero tailpipe emissions.

VW Places a $14 Billion Deal with Northvolt

Northvolt, a Swedish battery company that secured $1 billion in funding from Goldman Sachs and Volkswagen in 2019, has landed a large $14 billion battery contract with VW for the next ten years.


The large purchase answers some doubts about where Volkswagen would acquire the batteries for its massive push into electric cars, which will see the company reach 1.5 million electric vehicle manufacturing capacity by 2025.


Northvolt will not only become Volkswagen Group's strategic lead supplier for battery cells in Europe, but the German carmaker will also increase its stock investment in the company.


Northvolt's gigafactory in Sweden will be extended as part of the cooperation. At the same time, Northvolt agreed to sell its joint venture stake in its Salzgitter, Germany factory to Volkswagen as the carmaker tries to expand its battery production activities throughout Europe, according to the firms.


The arrangement between Northvolt and VW raises Northvolt's total contracts to $27 billion in the two years after it received its $1 billion financial infusions.


"Volkswagen is a major investor, client, and partner on the road ahead, and we will continue to work hard to provide them with the cleanest battery on the globe as they quickly increase their fleet of electric cars," said Peter Carlsson, Northvolt's co-founder and CEO, in a statement.


ABB, BMW Group, Scania, Siemens, Vattenfall, and Vestas are among Northvolt's other partners and clients. These companies represent some of Europe's top manufacturers.


The business said in 2019 that its cell production capacity may reach 16-gigawatt hours and that it has sold $13 billion worth of capacity until 2030. As a result, the Volkswagen transaction will eat up a large chunk of the new product lines.


Northvolt's battery company was designed to leapfrog the European Union into direct rivalry with Asia's major battery producers — Samsung, LG Chem, and CATL — and was founded by Carlsson, a former executive at Tesla.


Carlsson indicated that Northvolt would need to create up to 150 gigawatt hours of capacity to meet expectations for 2030 electric car sales when the business originally announced its $1 billion financing round.


The facility in Sweden is planned to produce at least 32-gigawatt hours, owing to support from Swedish pension funds AMF and Folksam, the Ikea-linked IMAS Foundation, and major financial partners Volkswagen and Goldman Sachs.


For Northvolt, the previous several months have been frantic. Earlier this month, the business announced the purchase of Cuberg, a Silicon Valley-based startup.


Northvolt gained a footing in the United States and developed its advanced technology center due to this transaction.


Northvolt will also have access to the newest battery chemistry, lithium metal batteries, which is being heralded as the industry's savior.


Cuberg split out of Stanford University in 2015 to market its "next-generation battery," which combines a liquid electrolyte and a lithium metal anode. Boeing, BETA Technologies, Ampaire, and VoltAero are among the company's clients. It is funded by Boeing HorizonX Ventures, Activate.org, the California Energy Commission, and the Department of Energy, and Stanford's TomKat Center.


Cuberg's cells have a 70 percent longer range and capacity than similar lithium-ion batteries built for electric aircraft. According to a release, the two businesses intend to adapt the technology to Northvolt's automotive and industrial product portfolios, to industrialize 1,000 Wh/L cells by 2025 while satisfying the complete range of vehicle client needs.


In a statement, Peter Carlsson, CEO and co-founder of Northvolt, stated, "The Cuberg team has shown amazing capacity to produce world-class technology, proven outcomes, and a great client base in a lean and efficient business." "By combining these characteristics with Northvolt's expertise and technology, we can increase both performance and safety while lowering the cost of next-generation battery cells even more." This is crucial for speeding up the transition to completely electric cars and meeting the demands of major automotive businesses promptly."

Vale (VALE) Signs a Supply Agreement with Northvolt for Nickel Products

Vale Canada and Northvolt AB, a manufacturer of lithium-ion cells, have signed a multi-year deal. Vale will provide Northvolt AB with low-carbon nickel products under the agreement terms. Vale has reached a major milestone in its attempts to capitalize on the spike in electric vehicle demand. The agreement builds on both sides' efforts to reduce carbon emissions in the electric vehicle supply chain.

 

Vale is a prominent worldwide manufacturer of nickel products with low carbon content and high purity. Vale is anticipated to sell 5% of its output into the electric vehicle industry, and it intends to raise this to 30-40 percent. By 2030, the corporation plans to spend between $4 billion and $6 billion to reduce carbon emissions by 33 percent. This will help it achieve its target of zero emissions by 2050.

 

Northvolt wants to set the standard for battery manufacturers by reducing carbon emissions by up to 90% when compared to current benchmark batteries. This will be facilitated in part by using sustainable energy in manufacturing and recycling. Northvolt uses sustainable energy and smart technologies to create batteries with a low CO2 impact. This Vale-Northvolt cooperation is the culmination of more than two years of negotiations and is anticipated to pave the way for future collaboration in various fields.

 

According to Bloomberg, Tesla TSLA has inked a multi-year arrangement with Vale for the supply of nickel from Canada.

 

Developing batteries used in electric power vehicles is becoming more important as climate change worries grow. As a result, demand for metals used in battery manufacturing has increased. As a result, demand for nickel in batteries is expected to increase by more than 500% over the next decade. Meanwhile, lithium demand is predicted to grow at 25-35 percent per year over the next decade, with a substantial supply-demand gap emerging in the second half of the decade.

 

Vale, BHP Group BHP, and Rio Tinto plc RIO are all attempting to meet this demand. Last year, BHP Group signed a deal with Tesla to supply nickel from the Nickel West mine in Australia. BHP and Tesla are cooperating on methods to make the battery supply chain more sustainable, emphasizing end-to-end raw material traceability utilizing blockchain and technological exchange for battery raw materials manufacturing.

 

Earlier this year, Tesla inked a nickel supply agreement in the United States, choosing Talon Metals Corp's Tamarack mining project in Minnesota. Rio Tinto plc and Talon Metals have partnered on the project.

 

Rio Tinto recently purchased the Rincon lithium project in Argentina for $825 million. It is a huge undeveloped lithium brine project in Argentina's Salta Province, situated in the center of the lithium triangle. Rio Tinto will be well-positioned to fulfill rising lithium demand.