Electrical automobile battery maker Northvolt on Tuesday introduced a $1.1 billion funding increase, with a variety of buyers — together with Volkswagen and Goldman Sachs Asset Administration — participating within the capital elevate.

In an announcement, Sweden-based Northvolt mentioned the $1.1 billion convertible word could be used to finance the corporate’s “growth of battery cell and cathode materials manufacturing in Europe to assist the quickly increasing demand for batteries.”

Different buyers within the elevate embrace Baillie Gifford, Swedbank Robur, PCS Holding and TM Capital.

Northvolt not too long ago mentioned its first gigafactory, Northvolt Ett, had began industrial deliveries to European prospects. The agency says it has orders amounting to $55 billion from companies comparable to Volvo Automobiles, BMW, and Volkswagen.

Gigafactories are amenities that produce batteries for electrical autos on a big scale. Tesla CEO Elon Musk has been extensively credited as coining the time period.

Northvolt’s most up-to-date funding announcement comes at a time when main European economies are laying out plans to maneuver away from road-based autos that use diesel and gasoline.

The U.Okay., for example, desires to cease the sale of latest diesel and gasoline vehicles and vans by 2030. It’ll require, from 2035, all new vehicles and vans to have zero-tailpipe emissions. The European Union — which the U.Okay. left on Jan. 31, 2020 — is pursuing comparable targets.

Because the variety of electrical autos on our roads will increase, the competitors to develop factories able to manufacturing EV batteries at scale is intensifying, with firms like Tesla and VW trying to set up a foothold within the sector.

In an announcement issued Tuesday, Northvolt’s CEO and co-founder, Peter Carlsson — who beforehand labored for Tesla — was bullish in regards to the future. 

“The mixture of political resolution making, prospects committing much more firmly to the transition to electrical autos, and a really speedy rise in client demand for cleaner merchandise, has created an ideal storm for electrification,” he mentioned.

Based on the Worldwide Vitality Company, electrical automobile gross sales hit 6.6 million in 2021. Within the first quarter of 2022, EV gross sales got here to 2 million, a 75% enhance in comparison with the primary three months of 2021.