Northvolt Stock and IPO: How To Invest in a Leading European Battery Maker

As the world turns its back on fossil fuels, electric cars and the lithium-ion batteries that power them have become critical to the climate transition. Meet Northvolt, the Swedish lithium-ion battery startup that wants to move the center of battery manufacturing from Asia to Europe, and learn if there’s a way to invest.

Anna Ng   Updated March 21st, 2022

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What is Northvolt?

Northvolt is a Swedish lithium-ion battery-maker that wants to produce “the world’s greenest batteries.” The batteries will power electric cars, energy storage, and more. Although Northvolt’s batteries don’t rely on the same chemistry as Tesla’s, Northvolt says that performance is becoming comparable.

Sustainability is core to Northvolt’s value proposition. To lower the carbon footprint of battery production, they rely on hydroelectric power and other renewables, which are abundant in Sweden. The startup says that is batteries will have an 80% lower carbon footprint than those made using coal energy. Besides, the batteries will be 95% recyclable, an important consideration when battery metals are scarce.

Northvolt’s green batteries are not just a concept. They are already being produced. Northvolt is the first European startup to make batteries at a gigafactory in Europe, which they did right before the end of 2021. The company expects to deliver its batteries to customers in 2022.

With demand for EVs skyrocketing, carmakers are scrambling to get their hands on batteries. Covid-related supply bottlenecks and geopolitical tensions with China highlight the need to have batteries manufactured elsewhere. Right now, electric car batteries are manufactured in Asia by companies like China’s CATL and BYD, Japan’s Panasonic and South Korea’s LG, SK Group, and Samsung.

Northvolt is trying to create a supplier that makes batteries in Europe, competing with Asian manufacturers. And Northvolt doesn’t want to limit its ambitions to Europe – they may expand to Asia and North America, too.

The Stockholm, Sweden-based company was founded by Paolo Cerruti and Peter Carlsson, a former Tesla executive, in 2016. They are backed by carmakers like Volkswagen, BMW, and Volvo. Volkswagen even bought a 20% stake in the company in 2019. Northvolt has already received $50 billion in battery orders, mostly from car manufacturers, including $14 billion from Volkswagen.

Northvolt’s factories

To date, Northvolt has planned three gigafactories in Europe:

  • Northvolt Ett. The gigafactory in Skelleftea in Northern Sweden is where Northvolt started assembling battery cells at the end of 2021. Northvolt expects to expand annual production to 60 GWh
  • A second factory to be built on a site of a closed paper mill in Sweden. Operations should start in 2024. When it’s at full capacity, the renewables-powered facility will produce 100 GWh of battery cathode material annually
  • Northvolt Drei. Powered by clean energy in Germany, the factory is expected to produce battery cells with an annual capacity of 60 GWh. If everything goes as planned, Northvolt Drei will employ 3,000 people and start producing batteries in 2025

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Northvolt-Volkswagen partnership

German automaker Volkswagen owns a 20% stake in Northvolt and has already placed $14 billion in orders spanning ten years. The partnership between the two companies was first disclosed in 2019. It is centered around Northvolt Ett, the gigafactory in northern Sweden, which will fulfill the orders from the carmaker.

Northvolt-Volvo partnership

Volvo wants to shift all of its production to electric cars by 2030. The carmaker and Northvolt are collaborating on a German gigafactory, with construction due to start in 2023. The partners expect that the renewables-powered factory will produce battery cells with an annual capacity of 50 GWh.

And although Northvolt’s activities have so far been limited to Europe, Volvo’s global footprint can help them move into Asian and U.S. markets.

Is Northvolt public?

No, Northvolt is a private company, though it has successfully raised a total of $6.5 billion in funding. In June 2021, Northvolt raised $2.75 billion from investors, including Volkswagen, BMW, Goldman Sachs Asset Management, Swedish pension funds, Baillie Gifford, and Spotify CEO Daniel Ek. The latest fundraising round reportedly valued the company at almost $12 billion.

When will Northvolt IPO?

Back in July 2021, Germany’s Manager Magazin reported that Northvolt was thinking about going public in 2022 or 2023 at a reported valuation of 20 to 30 billion euros. However, the company has not made any official announcement about an IPO, so time will tell.

How to buy Northvolt stock

If you are an accredited investor, you can buy shares in private pre-IPO companies.

Pre-IPO investing platforms like EquityZen and Forge (SharesPost) let you buy shares from employees with stock options. Startup employees may feel rich on paper, but it’s hard to buy a house or pay for college with stock options. The risk is that company employees always know more about the company than you do, and you can’t be sure why they are selling.

Pre-IPO investing is only for accredited investors. To be an accredited investor, you need to:

  • Earn $200,000 a year for two years and expect the same this year ($300,000 for couples) or
  • Have a net worth of over $1 million, excluding your main home or
  • Hold a Series 7, 65, or 82 license

If you qualify, you can check out Northvolt’s pre-IPO shares on EquityZen or Forge. But bear in mind that pre-IPO investing and startup investing are very risky. Although Northvolt has very impressive backers and pre-orders, the company will likely be unprofitable for a long time, and their batteries don’t power EVs that are on the road today.

Northvolt stock alternatives

If you are not an accredited investor, don’t like the idea of pre-IPO investing, and would like to be able to sell and buy shares as you please, there are other battery manufacturers out there. Some of the best-known EV battery stocks are:

  • Contemporary Amperex Technology Co (CATL) (SHE:300750)
  • LG Energy Solution Ltd (KRX: 373220)
  • Panasonic (PCRFY)
  • QuantumScape (QS)
  • Solid Power (SLDP)

🔔 Learn more about publicly traded EV battery manufacturers.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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