Northvolt recieves US $400 million from Canadian firm IMCO

In Canada, the Swedish battery cell manufacturer Northvolt has garnered US $400 million in fresh capital from the Investment Management Corporation of Ontario (IMCO). The equivalent of 366 million euros is to be invested in expanding production but a project in Canada could also benefit.

IMCO’s investment in Northvolt is in the form of convertible bonds. According to IMCO, the fresh capital is meant to enable Northvolt to expand its production of battery cells before a possible IPO. Northvolt’s preparations for a factory in Germany are progressing well, but the battery cell manufacturer is also planning a factory in Canada with its subsidiary Cuberg.

The latter project in particular is likely to receive a boost from the investment by the Canadian pension fund. A battery factory in North America is considered very attractive because of the current subsidy situation in the USA – so much so that Northvolt could give the project priority over the factory in Germany because of US subsidies. Both Canadian locations under discussion are in the province of Quebec, not in Ontario, which graces the name of the investment firm.

According to Reuters, the $400 million is IMCO’s biggest investment in Europe to date. “Northvolt really fits a lot of the trends that we’re looking to invest in,” Rossitsa Stoyanova, IMCO’s chief investment officer, said in an interview with the news agency. “Whether it (Northvolt) goes public or stays private, we’ve done our homework and we are happy with the investment.” A Northvolt spokesperson also told Reuters that the company hoped to announce “the next steps in our financing plan in the near future”.

Northvolt could be valued at more than $20 billion in an initial public offering, the equivalent of about €18.3 billion, according to earlier reports. The Swedish company shipped the first battery cells from its first factory in Skelleftea in 2022. Since 2017, Northvolt has raised more than eight billion US dollars in debt and equity to cover both development and the construction of production facilities and raw material costs in purchasing. By 2030, the company aims to reach a production capacity of 150 GWh and intends to deliver battery cells with a particularly low carbon footprint.

“We are excited to be working with IMCO’s Fundamental Equities and Global Infrastructure teams to shape the future of clean energy together,” said Alexander Hartman, CFO of Northvolt. “This investment fuels our expansion efforts, allowing us to further extend our global footprint and drive sustainable progress in our mission to deliver the world’s greenest battery.”

“Penetrating the EV battery industry is notoriously hard given significant technological and operational hurdles, and yet, Northvolt has achieved its ambitious goal to become Europe’s leading EV battery platform,” says Michael Tsada, Senior Portfolio Manager for Fundamental Equities at IMCO, in an interview published on the company’s website. “We were also impressed by Northvolt’s ability to align its mission of producing the industry’s most sustainable EV batteries to the needs and wants of automakers, regulators, and consumers, as evidenced by its multibillion-dollar secured-order book which includes customers such as BMW, Volkswagen and Volvo.”

reuters.com, imcoinvest.com (press release), imcoinvest.com (interview)