Northvolt’s CEO: ‘We want to make a big chunk of impact’
Swedish battery maker Northvolt has joined forces with Gothenburg’s Volvo Cars, which is set to become a purely electric vehicle maker. Together the firms are investing SEK 30 billion (approx. EUR 3 billion) in a joint battery production plant and R&D centre in Gothenburg. The plans were made public around one year ago.
Why did the investment land in Gothenburg?
“Why we decided in Gothenburg's favour was its ability to attract key skills and talent. There are also some logistical advantages with Gothenburg, the Port of Gothenburg, and the proximity to Volvo. This is high-tech industry. This type of production is a bit like combining semi-conductor industry and the food industry - but a hundred times the scale of the semi-conductor industry. This means that we have to build a very international team with many different skills and experiences in order to succeed,” said Peter Carlsson, who was interviewed on-stage at Business Region Göteborg’s Economic Outlook seminar on 16 November.
Besides the production plant, Northvolt and Volvo Cars are establishing a joint R&D centre. This will play an important role, according to Carlsson. The new centre will merge the know-how of both Volvo Cars and Northvolt and drive progress, for example, in terms of optimizing the integration of electric powertrains in Volvo cars.
“If I compare my Tesla model S, that I was involved in building 7-8 years ago, it has a battery pack of around 90-95 kilowatt-hours. Three years ago, I got a new Audi, which has the same sized battery. But I still get 25-30 per cent longer range on my Tesla. This is all about how you integrate and build the powertrain, and how you build the car around the powertrain. We are making progress when it comes to the batteries, but the automotive industry needs to make big strides forward on how to build cars optimized for the electric powertrain.”
“This is where we hope to create an additional edge, where Volvo can optimize even more based on what their customers want and come out even quicker with products.”
A do or die decade
According to Carlsson, the automotive industry has been quite stable during the past two decades. The market share of major car manufacturers hasn’t changed that much. But the next decade, as we transition to purely electric vehicles, will be a different story.
“It will be a do or die decennium for the traditional car manufacturers and those that challenge from electrification. The ability to be the fastest to integrate and give the best customer experience with the latest technology will be key in terms of who comes out a winner in this transition.”
During the interview, Carlsson was also questioned about his time at Tesla, where he worked alongside Elon Musk between 2011 and 2015.
“I would never have dared to start this type of thing [Northvolt] if I hadn’t been there. We got a gigantic factory in Freemont that was empty. We had to build up the car production from scratch. We had a relatively immature design and we had a supply chain with suppliers all over the world that needed to get started. The first period was painful. Even among the most enthusiastic [colleagues], the torch started to go out. But then, once you overcame an obstacle and then another. Just getting a little win makes such a difference for morale. There were a lot of people that believed we wouldn’t succeed.”
“When we are now in the process of starting up our factories, it’s so important to have that experience. How difficult and heavy it can get. It’s just to keep a cool head, be systematic, keep moving forward and eventually the ketchup effect will come.”
Important to have a higher purpose
Carlsson also said that Northvolt’s purpose is to be an enabler for the transition to a green society. An enabler for electromobility, to reduce carbon dioxide emissions and limit global warming.
“We want to succeed and at some point be able to say that we made a big chunk of impact on one of our biggest crises. This is important and we talk about this a lot [in the company]. It’s important when you are sitting late in the evening in a bottleneck.”
What do we need to do to become more sustainable?
“It demands a hell of a lot,” said Carlsson. “For one, we need to transform our transport industry. It is starting to happen and rather accelerated in the car industry. It is also starting to happen in trucks and buses, etc. We have certain challenges with aviation. It will take a little longer. In part we need to raise the energy density of batteries. We will also have to change some of our behaviour. But we will be able to fly almost fossil-free in the future.”
“Then we have energy generation, which is also extremely important. We are proud that we have green electricity in Sweden, but we also have nearly 300 terra-watt hours of fossil energy that goes into our total energy system. We have to deal with this, and it could happen much more quickly.”
An ability to attract talent is vital
According to Carlsson, competence and building up the supply chains are the two biggest challenges the industry is facing.
“As we are somewhat of a pioneer in Europe, we have had an advantage in that we have succeeded in attracting a critical mass that we can build on. There are a lot of projects in Europe, for example, that don’t have the capacity to design a high-performance battery.”
“But we need many thousands of people. The Volvo Group has also sought a permit to build [a large-scale battery production plant in Mariestad, around 170 km north-east of Gothenburg] and they will need many thousands of people. The side-effects of these are enormous. So, we need a lot of help. We need help both in terms of education connected to this transformation and to adjust the energy focus at our universities. These are extremely important for our competitiveness. We hold a formidable position in Europe today, but it’s very important that we maintain it.”
“Everyone that is part of this ecosystem needs to stay on their toes, as in this transformation, there will be winners and losers.”
“Sweden and in particular West Sweden’s future welfare will be steered a lot by how successful we are to transform and lead in this race. And to a large extent, this will be determined by how successful we are at attracting the best talent.”
The interview was held in Swedish. A replay of the full interview is available on our Swedish website. Link to video >>
Novo Energy awarded the Key to Gothenburg
Novo Energy, the joint-venture between Northvolt and Volvo Cars, was awarded the Key to Gothenburg, for its investments in the new battery gigafactory and R&D centre in Gothenburg on 16 November. These investments will create over 3,000 jobs in Gothenburg and generate thousands of more jobs across the region.