Helena Soderpalm, Supantha Mokherjee

STOCKHOLM (Reuters), Northvolt chief executive Peter Carlsson hopes to compete with Elon Musk for the best electric vehicle batteries. He must start manufacturing them.

The Swede wants his factory to be open this month. It is located approximately 200 km from the Arctic circle. He and his engineers and technicians work at an incredible pace.

Carlsson stated to Reuters that they are currently working very hard right now in order to maintain the schedule. Even if this means that the first battery will be made on New Years Eve, it’s still going out.”

This lithium-ion plant, which was built by an European company for the first time in Europe, is intended to launch a region battery champion capable of competing with Tesla (NASDAQ) and Asian suppliers like Panasonic (OTC), LG Chem and CATL.

Northvolt has received funding of more than $6.5 Billion from Volkswagen (DE:), Spotify (NYSE;) and the European Commission. It also receives contracts in excess $27B from carmakers.

The company plans to make enough batteries each year to power more than 1,000,000 electric vehicles (EVs) at its Swedish facility in Skelleftea. Later, it will supply other industries that are switching to electric such as industrial machinery, ferries, and other mining towns.

Carlsson plans to open two additional factories within the next ten year.

Carlsson, a former head of supply and production at Tesla which he quit in 2015, hopes that his work with Musk in scaling up Tesla’s California plant will be of benefit to him in northern Sweden.

Carlsson stated, “During my years working with Elon at Tesla I learned how much fun it was to build and scale and how challenging that can be.”

When you scale up, there are always supply chain problems. It is something that I feel we’ll be very focused upon over the next two-years.

Recalls from major producers of EV battery have demonstrated how challenging it is to manufacture batteries on a large-scale, as well as the need for a “extremely complicated” supply chain, with geopolitical and corporate risk.

Hans Eric Melin (founder of the London-based consultancy Circular Energy Storage) stated that it is a daunting task to get product quality right and scale production.

GREEN CREDENTIALS

Northvolt has approximately 2500 employees from 108 countries. They plan to increase that number by 5,000 over the next five-years.

Northvolt Cars and Volvo Cars will announce an EU location for their joint gigafactory in the first quarter of next year.

Hakan Samuelsson, Volvo CEO and founder said that they could create their own batteries to start at zero. But I doubt that it would prove efficient enough.

There is intense competition for talent. The majority of battery engineers are located in Asia, and Asian suppliers like Samsung (KS-SDI) have set up European factories. Some startups also want to be incorporated.

Tesla seeks to fill gigafactory positions in Berlin.

“She left you” is how Skelleftea sounds. It can’t rival the German capital’s clubs scene. The climate in the city can also be a problem. There’s snow from November through April, with only a handful of hours of sunlight during winter.

Carlsson believes that engineers will be attracted to the area’s green credentials. Skelleftea relies largely on wind power and hydropower, and will also be completely renewable. There will be a recycling of batteries.

He said, “As they go into new generations skill and talent they don’t want a paycheck, they want purpose. They want to be part in a mission.”

However, money is important. Every employee receives an equity share as part of his or her salary.

Northvolt plans to create an entire environment for staff members from India, South Korea, Japan, and Japan. This ecosystem will include housing and social events sponsored by the company. The company plans to operate electric helicopters from the airport at Skelleftea and the plant.

Northvolt requires money injections to continue its expansion.

Carlsson claims that the $6.5 billion already raised in funding will not suffice.

Northvolt wants the Skelleftea power plant to reach production capacities of 60 gigawatts. That could be enough to power 1 million vehicles per year, depending on their battery sizes. The company is trying to capture at least 20%-20% market share in Europe by 2030.

Volvo Cars and Northvolt announced last week that they would open a Swedish joint research and development center as part of an investment worth $3.3 billion.

Melin, a consultant, stated that Northvolt would be well placed to achieve its production goals and increase market share.

“With tailwinds, a secure supply of raw materials, and a well-positioned mix of products I can’t imagine what could prevent them,” he said. He said that these are “big ifs”.