As the auto industry transitions to electric vehicles, the battery has become a crucial component. Control of battery technology means control of the future EV market. However, European automakers have fallen behind Asian rivals in battery production. To regain competitiveness, Europe is determined to nurture its own battery champions. Northvolt, a Swedish startup aiming to build Europe’s largest lithium-ion battery factory, has emerged as a frontrunner. Here is a look at northvolt investment opportunities and strategies.
Northvolt’s Leading Position in Europe’s Battery Industry
Founded in 2016 by former Tesla executive Peter Carlsson, Northvolt has secured over $6.5 billion in funding and contracts from investors like Volkswagen, Goldman Sachs, BMW, and the European Investment Bank. Northvolt is constructing factories across Europe including Northvolt Ett in Sweden and a joint factory with Volkswagen in Germany. The gigafactories will have a total annual capacity of 60 GWh by 2024, making Northvolt Europe’s largest homegrown battery maker. Northvolt is also building abattery recycling plant that will reuse over 50% of raw material from spent batteries. Additionally, Northvolt’s proprietary low-carbon battery technology gives it a sustainability edge. With its scale and next-gen innovations, Northvolt is positioning itself as the battery partner of choice for European automakers.
Northvolt’s Fundraising Rounds Present Early Investment Opportunities
As a startup seeking rapid growth, Northvolt has raised capital through funding rounds offering private investment opportunities. Northvolt’s Series A in 2018 raised $115 million. The 2019 Series B raised $1 billion from Volkswagen, Goldman Sachs, and others. In 2020, Northvolt secured a $600 million loan from the European Investment Bank. The latest raise came in January 2022, a $750 million capital injection led by Amber Infrastructure. These fundraising rounds have boosted Northvolt’s valuation past $11.75 billion. For accredited investors, getting in early on a fast-growing company’s fundraising rounds can give exposure to a potential unicorn.
Northvolt Stock Listing Could Give Public Investors Access
So far, Northvolt shares are not publicly traded. However, Northvolt CEO Peter Carlsson has hinted at a potential IPO within a few years. This would give retail investors a chance to buy Northvolt stock. Timing would align with Northvolt’s gigafactory ramp-up and likely dominance of Europe’s battery market by 2025. While not imminent, a Northvolt IPO could create a hot new EV stock for public investors to target.
Investing in Northvolt’s Customers Provides Indirect Exposure
Major automakers like Volkswagen and BMW have invested heavily in Northvolt. These automakers are betting their electric vehicle future on Northvolt’s batteries. Investing in Volkswagen and BMW stocks provides indirect exposure as their fortunes depend on Northvolt’s success. Further, investors can target Northvolt’s raw material suppliers such as aluminum producer Norsk Hydro and clean nickel miner Talon Metals. As Northvolt scales up production, providers of key battery ingredients should see demand growth.
Northvolt’s ambitious plan to build Europe’s largest battery factories has made it the continent’s battery leader. As investors position for the electric vehicle revolution, Northvolt will be a company to watch. Direct private investment may be possible during fundraising rounds. An IPO could eventually bring Northvolt shares to the public market. In the meantime, investors can gain exposure by targeting Northvolt’s auto partners and raw material suppliers.