You can tell a lot about a company’s expected prospects by the kind of investor it attracts. Take Northvolt, which makes environmentally friendly batteries for electric cars.
Among its backers there are not one but four Swedish pension funds, which have collectively put $400 million (£291m) into the business. Pension schemes typically put their cash into safe investments with a good chance of making solid, dependable returns.
That faith has already been vindicated by Northvolt announcing a joint venture with Volvo that will see the pair build another Sweden-based battery factory as well as a research and development centre.
It comes after Northvolt signed a similar production deal with Volkswagen in 2019 but differs in that, with Volvo, Northvolt will focus on developing new technologies to be used by the Swedish car maker and its all-electric subsidiary Polestar.
In addition to Volkswagen and Volvo, the company makes batteries for BMW and Scania, and plans to ramp up production with the addition of two new factories in the next decade. It is developing recycling capabilities alongside its battery technologies – an area China has failed to corner the market in.
Europe is the bright spot for electric vehicle sales. There were 2.2 million electric vehicle sales last year and growth of 70 per cent in that segment alone when the auto industry as a whole is declining.
There’s just one problem: the vast majority of the batteries that went into those cars had to be transported thousands of miles from China first. Many in Europe see a hope in Northvolt to take on the Chinese companies.
Reference- Business Insider, CNBC, Forbes, Northvolt website, Volvo website & PR, EV Obsession, Wired