Northvolt’s Peter Carlsson is moving at a furious pace in his ambition to become Europe's automotive battery leader. After his first giga factory, Northvolt One in Skellefteå, Sweden—which is almost ready to mass-produce car batteries—his track record with the company he founded in 2016 looks quite impressive. In terms of new factory projects that are finished, started or ready to start:

Northvolt Zwei, Volkswagen’s giga factory in Salzgitter, Germany, is under construction. However, Northvolt’s share in the joint venture has been sold to Volkswagen.
He has initiated and signed for a joint giga factory venture and a battery R&D lab with Volvo Cars.
Built and finished a battery R&D lab in Västerås, Sweden.
Built a battery system configuration site in Gdansk, Poland.

But it doesn’t stop there. Recently, Carlsson revealed his next move: Northvolt Drei, a new giga factory in the northern state of Schleswig-Holstein and the Heide region in Germany, for the production of lithium-ion batteries. To date in this project, Northvolt has signed a Memorandum of Understanding (MoU) with Schleswig-Holstein and the region of Heide for the development of a 60 GWh lithium-ion battery manufacturing plant. Of course, an MoU is not exactly the same as a final greenlight for these plans, but it is close enough to regard Northvolt Drei as a realistic venture.

Northvolt Drei will employ 3,000 people and produce its first batteries by the end of 2025.

A Third Giga Factory. “We are pleased to announce Northvolt Drei, a project that fits well into a promising future cluster of interest rate technology initiatives emerging in northern Germany and promoting the wider European transition to sustainable development, a society in which Germany plays a crucial role,” says Northvolt's co-founder and CEO, Peter Carlsson, in a comment on the announcement of the company's third giga factory.

There is no doubt that Carlsson and his employees at Northvolt are well on their way to achieving the market vision he spoke about in an earlier engineering.com article from 2020: the goal of reaching a 25 percent market share in Europe for the company's battery solutions in automotive. To live up to this statement meant that he had to build more giga factories.

By 2020, the world consumed around 200 GWh of batteries. “But within ten years, the forecast is that this will go up to 3,000 GWh,” he says, and explained that one GWh represents an investment cost of 100 million euros, or around $110 million, which means that a 60 GWh plant requires investments of $6.6 billion.

“To achieve the goal of a European market share of 25 percent, Northvolt must build for 150 GWh,” he adds. If the global production level will reach 3,000 GWh, this means that the European portion will land at 600 GWh.

While Carlsson’s plans will cost a significant amount to realize, the rewards in terms of battery orders look good. In total, as of today Northvolt has secured commercial contracts worth $27 billion.

A 3D model of Northvolt’s planned third giga factory in Germany. Digital twins play a key role in realizing these huge sites. The Northvolt Drei factory is aimed at producing 60 GWh and employ around 3,000 coworkers.

Why Digital Twins are a Secret of Success

With the announcement that Northvolt will construct the new giga factory Northvolt Drei, the intention is that by the end of 2025, when the factory is completed, another 60 GWh can be added to what they previously produced. With the new site, Northvolt's pipeline of battery production capacity under development increases to over 170 GWh.

The goal is in sight, and a question many are asking is: How can Northvolt get there in such a short time?

Carlsson's answer centers on super efficiency, digital twins and building production blocks in very complicated sets. How is that possible?

“Well, you have to build a damn good digital twin,” says Carlsson. He and his employees seem to be in full swing when it comes to this.

The digital basis for this is mainly built up around Siemens Digital Industries' closed-loop manufacturing concept (CLM) on the design and automation side. It also involves ABB’s Ability family modules in important roles when it comes to factory electrification.

What is the closed-loop manufacturing concept? In short, CLM enables flexible operations and back-to-birth traceability by creating a digital thread connecting the three critical platforms of PLM, ERP and MES. The digital thread is continuously improved with feedback loops to form a comprehensive digital twin that includes the product, production and performance.

Northvolt’s First Battery Cell Produced in the Northvolt One Facility. The battery cell in the picture above is the first to have been designed, developed and fully assembled in a giga factory by a “home-grown” European battery company. “Today we are talking about a milestone for Northvolt that the team has worked very hard to achieve. Of course, this first cell is just the beginning. In the coming years, we look forward to Northvolt One expanding its production capacity significantly to enable the European transition to clean energy,” says Peter Carlsson, who is not only the company's CEO but also the company's co-founder, when he commented on this milestone.

Siemens’ Xcelerator and ABB’s Ability Portfolios in Leading Roles

On the PLM and manufacturing page, Northvolt’s work includes products mainly within the Xcelerator portfolio:

Teamcenter for plant and product lifecycle management is the backbone for battery manufacturing, as well as the blueprint for new battery factories. Moreover, areas such as material management (TC IMM), cost management (TC PCM) and substance compliance (TC Substance Compliance) are important aspects covered by Teamcenter.

NX CAD is the main design and authoring tool for the battery, packs and related components.
Battery Design Studio, Simcenter Star-CCM+ and Amesim are used for different simulation and analysis (S&A) tasks.
Siemens Polarion, an application lifecycle management (ALM) tool, is used for software and requirements management.
Tecnomatix for digital manufacturing (DM) and plant processes simulation.
On the factory automation side, they use Siemens SIMATIC including control systems, integration and safety solutions, while engine motion control of servos is handled in Siemens SIMOTION.
Additionally, ABB’s Ability solutions are used for process automation and electrification.

Battery Simulation. The battery system is an essential element for the success of electrified vehicles and their broader democratization. Design teams must consider the system as a whole and create an optimal balance between safety, reliability, lifetime and performance while focusing on thermal management. Increasing power demands and fast charging put batteries under thermal stress, thus requiring maintaining battery cell temperatures within a very restricted range, whatever the environmental or operational conditions. Designing the most appropriate battery thermal management system while keeping costs, time and competitive edge under control requires new engineering methodologies where simulation plays an important role. Northvolt mainly uses Simcenter StarCCM+, Battery Design Studio and Amesim in this context.

Simulation is a Key Capacity

In general, simulation is one of the key capabilities. With the digital twin in the center, everything is possible to simulate at all levels, so that you can ensure that everything works as intended before moving on to the physical equivalents, as any changes and detected errors become expensive to fix.

Does it not work as you intended? Improve and optimize by going back and simulating again. That is an important aspect of CLM.

It is important to emphasize that the connections to the ERP systems must be included in the concept solution. If these connections do not exist, the link to the system will be missed. This means that several, possibly divergent, "truths" will exist; something that risks degrading process and manufacturing quality and opens the way for errors. "One single source of truth," as the mantra reads, is the desirable solution to avoid sources of error.

German BMW is one of the carmakers that will buy batteries from Northvolt. As of 2024, the Munich-based company plans to purchase electricity storage from the Swedish supplier Northvolt for two billion euros. After Samsung and the Chinese supplier CATL, Northvolt is the third battery cell manufacturer to which BMW is committed over the long term.

Batteries For One Million Vehicles

The real finesse in this set up is that every factory Northvolt builds principally uses a blueprint of the first giga factory Carlsson developed, Northvolt One.

This approach saves money and cuts lead times in development work, while at the same time smartly contributing to the possibilities of rationally scaling up production via more factories where it is appropriate to have them. The limitation is on the money rather than on technology, software and methodology; the facilities are, as noted above, expensive and a giga factory the size of Northvolt One with a planned production capacity of 60 GWh will cost around $6.6 billion.

As it is powered by the cleanest electricity network in Germany, Northvolt Drei is positioned to produce the cleanest batteries on continental Europe, the company notes in the press material. With the annual potential production capacity of 60 GWh, Northvolt Drei will supply a range of sustainably produced lithium-ion batteries to the European market, sufficient for approximately one million electric vehicles.

As initially noted, a new giga plant will increase Northvolt's battery production capacity to over a total of 170 GWh. This is meant to promote its mission, "to deliver batteries in a way that is characterized by clean energy, circularity and that is fundamentally different from the approach that dominates global industry today."

“Northvolt Drei is a project that fits well into a promising future cluster of electrical technology initiatives that are emerging in northern Germany,” says Peter Carlsson.

Transition To a Cleaner Truth

Carlsson commented on the matter, in the release, as follows:

“We are pleased to announce Northvolt Drei, a project that fits well into a promising future cluster of interest rate technology initiatives that are emerging in northern Germany and promoting the broader European transition to sustainable development, a society in which Germany plays a crucial role.”

Furthermore, Carlsson claims that Northvolt Drei’s high-performance lithium-ion batteries will be produced with the lowest environmental footprint on the European continent.

The location choice of Heide, Schleswig-Holstein, is the key to achieving this goal. The region has “the cleanest energy network in Germany; a network characterized by an excess of electricity, which is generated by wind power on land and sea, and amplified by clean energy provided through grid connections to Denmark and Norway,” according to the press release.

"Clean Energy Builds Sustainability"

“It matters how we produce a battery cell. If you use carbon in your production, you embed a lot of CO2 in your battery. But if we use clean energy, we can build a very sustainable product. Our philosophy is that new energy-intensive industries, such as battery manufacturing, should be established in actual geographical proximity to where the clean energy is produced,” says Peter Carlsson.

But it is not just clean energy that positions the Heide region and the broader industrial landscape around Hamburg that as ideally suited for Northvolt's growing presence in Europe.

In addition to being centrally located in the emerging European battery supply chain, which connects Scandinavia and continental Europe, the region also provides the space needed to establish a battery plant of sufficient size to take advantage of the economies of scale that are key to reducing battery costs.

Christofer Haux, acting CEO of Northvolt Drei.

German Industry Skills and Circularity

Access to German industrial expertise and vehicle expertise will provide additional opportunities. Local manufacturing expertise in the Schleswig-Holstein region and Heide will ensure that the factory supplies the highest quality batteries, while the factory itself will provide critical work experience with battery technology—an emerging cornerstone technology in the European economy.

With sustainability at the forefront of design and decision-making around Northvolt Drei, the plant will extract significant volumes of its raw material needs from recycled battery metals, as part of Northvolt's commitment to recover 50 percent of its raw material needs from recycling by 2030.

“Northvolt Drei is developed in a transparent and collaborative manner that makes the most of the many opportunities the project represents for the region,” says Christofer Haux, interim CEO of Northvolt Drei, in the release.

In addition to battery production, Northvolt Drei will focus on an on-site battery recycling facility that will ensure efficient recycling of by-products from the production process and provide a sustainable solution for end-of-life electric vehicle batteries recycled from European markets.

Throughout the scope of the project, Northvolt is keen to include the company's commitment to transparency and straightforwardness in its contacts with external stakeholders. This approach has proven successful in Sweden, Norway and Poland, and there is every reason to believe that it will support the delivery of another project with Northvolt Drei.