OMERS, Ikea’s IMAS, AP Funds 1-4 and Goldman Sachs back EV batteries

Northvolt has raised $1.1bn in convertible notes to open three factories in Europe and expand production of battery components for electric vehicles.

A consortium of investors – including OMERS Capital Markets, Ikea-funded IMAS Foundation, Swedish national pension funds 1, 2, 3 and 4, investing via their joint venture, 4 To 1 Investments, and Goldman Sachs Asset Management – has committed $1.1 billion to scale the production of electric vehicle batteries.

The investors have financed a $1.1 billion convertible note issued by Northvolt, a producer of battery components for electric vehicles. Northvolt will use the capital to open three factories in Europe: two gigafactories in Sweden and Germany and a cathode factory in Sweden. The company opened its first gigafactory in December 2021 in Sweden.

Northvolt has received orders worth $55 billion from car companies such as Volkswagen Group – which is also an investor – BMW, Fluence, Scania and Volvo Cars. Other investors include: AMF, ATP, Ava Investors, Baillie Gifford, Compagnia di San Paolo’s growth investment arm, Folksam Group, Olympia Group, PCS Holding, Swedbank Robur and TM Capital.

Private equity firms are showing increased interest in the infrastructure around electric vehicles, affiliate publication PE Hub reports. Clearlake Capital acquired manufacturing company BBB Industries, which has an electric vehicle battery production arm, in May 2022. TPG acquired electric vehicle marketing and education company ChooseEV in May 2022. EQT and Verdane struck deals backing electric vehicle charging companies in February 2022, and Energy Impact Partners is an investor in charging company Volta.

“I think we have a set of circumstances now that are very fertile for the acceleration of electric vehicles,” TPG Growth partner Scott Gilbertson told PE Hub. “Historically, the unit cost of operating an electric vehicle was cheaper, but the total cost of ownership was expensive. I think the democratization of vehicles and the knowledge of these EVs and charging locations is going to create a meaningful acceleration of electric vehicle adoption.”