Helena Soderpalm, Supantha Mokherjee

STOCKHOLM, (Reuters) – Northvolt will invest $750million to expand its Swedish laboratory, a senior executive stated. This is to keep up with the rising demand for lithium-ion battery technology as more carmakers switch to electric vehicles.

As it aims to take on major Asian players such as CATL and LG Chem, Northvolt said it would set up the “first R&D campus covering the entire battery ecosystem”.

Northvolt will begin production in Sweden this year at Skelleftea’s gigafactory. The company also intends to open a Vasteras office, raise the headcount from 400 to at most 1,000, and provide a place for customers to explore battery technologies.

China currently accounts for around 80% of the lithium-ion battery production. However, with rising demand, Europe’s capacity is expected to grow quickly. Northvolt plans to capture 25% of Europe’s market by 2030.

Northvolt CEO Peter Carlsson stated that the development at Vasteras was “the funnel” right now, and that it will be able to make a land grab. He also said that Northvolt would need to employ around 5,000 engineers in five years.

Carlsson shared his thoughts in an interview, “I have some slides presentation about the very early concepts…we hadn’t chosen Vasteras but we had a budget of 80 million,”

European carmakers want to make electric cars that rival Tesla’s (NASDAQ:) with Northvolt batteries.

Northvolt is supported by Volkswagen (DE:), Scania and the European Commission. Also, Spotify (NYSE;) founder Daniel Ek has contributed funding to more than $6.5 Billion. Nearly $20 Billion in orders came from the largest automakers.

Sources said that Northvolt had raised $11.75 billion in its most recent funding. Investments in electric vehicle and related areas have attracted a lot of attention from investors who have pushed up valuations of innovators such as Tesla Motors or Lucid Motors.