A Jolt for Europe's Electric-car Makers

Sweden’s Northvolt is leading an effort to forge a regional battery champion that can compete with rivals from Asia

- By James E. Ellis and David Rocks

In a dense forest just below the Arctic Circle, a half-dozen windowless concrete buildings rise above the snow-laden pines. Inside, massive machines combine lithium, nickel, manganese, and cobalt into a mix that will ultimately be turned into electrodes for shiny silver batteries. The facility represents Europe’s biggest effort to compete in the fast-growing market for electric vehicles, and the company behind it, Northvolt AB, promises to do so with far lower greenhouse gas emissions than rival manufacturers. “We are laying the foundations for one of the largest recycling facilities in Europe,” says Chief Executive Officer Peter Carlsson. “We need to build greener batteries, because if we don’t, we have a major climate impact.”

Since its founding six years ago by a pair of former Tesla executives, Northvolt has signed contracts valued at more than $50 billion with Europe’s leading automakers, which want to foster a battery industry in the region to match Asian giants such as China’s CATL, Japan’s Panasonic, and LG Chem from South Korea. Northvolt’s investors include Volkswagen, BMW, Goldman Sachs Group, and Spotify co-founder Daniel Ek. Although Europe’s automakers have long been leaders in combustion engines, they risk falling behind in a world where the most important— and expensive—part of the vehicle is the battery. “There are people at Volvo and Volkswagen who are super experts on how to squeeze the most out of an engine,” says Emad Zand, head of Northvolt’s battery systems. “Exactly the same thing applies to batteries. If you don’t have that technological knowledge, you’re lost.”