Northvolt has secured $1.6 billion in debt financing as it completes its massive battery factory and signs a battery supply contract with BMW.

Northvolt is a battery startup founded by two former Tesla executives who worked on Tesla’s Gigafactory 1 in Nevada with Panasonic.

The Swedish startup received investments from several companies, including Volkswagen, to build a massive battery factory in Sweden.

Volkswagen’s investment also came with the option to create a 50/50 joint-venture with the startup to build another battery factory to supply the automaker. The deal was finalized last year.

The company is poised to replicate the success of Tesla Gigafactory Nevada in Europe to supply batteries for Volkswagen’s electric vehicles.

Now we’ve learned that BMW is also going to be purchasing battery cells from the startup.

The two companies agreed to a long-term battery cell supply contract worth over $2 billion:

“In pursuit of expanding its offering of electromobility solutions, the BMW Group has signed a long-term supply contract worth 2 billion euros for battery cells with Northvolt. The battery cells will be produced from 2024 at Northvolt Ett gigafactory, currently under construction in Skellefteå, northern Sweden.”

Riding on that contract signed earlier this month, Northvolt announced today that it secured $1.6 billion in debt financing.

They wrote in a new press release today:

“Northvolt today announced the signing of a $1.6 billion debt raise provided by a consortium of commercial banks, pension funds and public financial institutions, increasing the total amount of capital raised to date for development of factories and R&D investments to over $3 billion.”

They have been making progress on their first gigafactory in Sweden:

The factory, called Northvolt Ett, is expected to have an annual output of 40 GWh and production is to start in 2021.

Northvolt Zwei, the company’s second factory in partnership with Volkswagen, is currently in the permitting phase and should come online in 2024.

With this new $1.6 billion in debt financing, Northvolt has now secured $3 billion in debt and equity since launching just 3 years ago.

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