VW, Goldman Sachs, Spotify Founder Back Tesla Rival Northvolt

(Benzinga) – Former Tesla Inc (NASDAQ: TSLA) employees Peter Carlsson and Paolo Cerruti are taking Tesla and its ambitious battery production goals head on.

Northvolt’s New Funding: Northvolt, founded by Carlsson and Cerruti, announced a new $600-million funding round Wednesday. This brings the company’s total raised since its 2016 founding to $3.6 billion.

Volkswagen AG (Pink: VWAGY), Goldman Sachs Group Inc (NYSE: GS), Baillie Gifford and Spotify Technology (NYSE: SPOT) founder Daniel Ek are among the investors in the round.

Northvolt said the funding will be used for investment in capacity expansion, research and development and recycling.

“With these world-class partners behind us, we have created a solid foundation to go on and execute our plans to enable large-scale manufacturing of green batteries in Europe,” Carlsson said.

Baillie Gifford is the largest outside investor in Tesla. The firm recently reduced its stake from 6.32% to 4.25% due to the stock’s huge 2020 price increase.

About Northvolt: Along with competing against Tesla, Northvolt is looking to take on major Asian players like CATL and LG Chem, both of which are Tesla suppliers.

Northvolt is targeting 25% market share in Europe by 2030.

The company is building a gigafactory in Sweden, with production planned for 2021. The permit planning stage is also underway for a German factory.

Northvolt is targeting 150 GWh of manufacturing capacity in Europe by 2030.

Deals in Place: Northvolt signed a deal with BMW (Pink: BMWYY), which is also an investor in the company.

The deal covers battery cells from Northvolt’s factory in Sweden starting in 2024. BMW aims to increase its number of electric vehicle offerings.

Northvolt has a deal in place for the supply of lithium from one of the largest producers in the world.

A five-year deal will see China’s Tianqi Lithium provide 6% to 10% of its annual production to Northvolt.

Tianqi has a similar deal in place to provide 15% of production to LG Chem.

Life After Tesla: Carlsson was in charge of supply chain for Tesla and worked for the company from 2011 to 2015. He was part of the launch of the Model S and worked closely with CEO Elon Musk.

Former Tesla CTO JB Straubel is on a similar path after leaving the automaker.

Straubel’s Redwood Materials is a company dedicated to recycling batteries and electronics, and it recently received an investment from Amazon.com, Inc. (NASDAQ: AMZN).

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