Tesla is currently ramping up lithium-ion battery cell production at its U.S. “Gigafactory” near Reno, Nevada.
But the automaker has discussed plans for at least one additional Gigafactory, presumably to meet demand for battery cells related to large-scale electric-car production outside the U.S.
Northvolt—formerly known as SGF Energy—aims to start manufacturing lithium-ion batteries by 2020, and hopes to produce 32 gigawatt-hours of cells by 2023.
If completed, Northvolt’s factory would be the first and largest European attempt to rival the Asian firms that currently dominate lithium-ion battery manufacturing for electric cars.
“If nobody does anything, Europe is going to be completely dependent on an Asian supply chain,” Carlsson told the Financial Times, adding that “it’s now or never.”
As electric-car sales grow, the concentration of battery-manufacturing infrastructure in Asia has also worried policymakers in Germany.
ALSO SEE: German government worries carmakers vulnerable to electric-car onslaught (Dec 2016)
An internal report from the German economics ministry published late last year warned that the country’s large auto industry was falling behind in the manufacture of electric-car components such as battery packs.
That poses a risk of “lasting dependence on Asian manufacturing” for these components, the report said.
In fact, the Finnish city of Vaasa made a direct pitch to Tesla last year for a future gigafactory, based on its location near the largest of those deposits, in Kaustinen.
Finland is also home to large deposits of cobalt, which is used in lithium-ion batteries but has become more difficult to acquire lately due to hedge funds buying up stocks.
CHECK OUT: Why one Finnish city thinks it’s ideal for next Tesla Gigafactory (Dec 2016)
In addition to raw materials, Northvolt hopes to position its factory near renewable-energy sources.
Tesla only produces lithium-ion cells and battery packs for its own use, believing large-scale, in-house lithium-ion production is necessary to meet its ambitious electric-car sales goals.