STOCKHOLM -- A former Tesla executive is trying to raise at least $4 billion to build Europe's biggest battery factory in Sweden to meet an expected surge in demand as the region's automakers switch to electric vehicles.
Peter Carlsson, who managed Tesla's supply chain before returning to his native country, believes European automakers' push into electric propulsion implies demand for batteries that far exceeds anything now planned.
Some carmakers want to ramp up battery production in-house, wary of the dominance of Asian players such as Panasonic, LG Chem and China's CATL.
German company BMZ opened the first section of a battery plant last year while LG Chem is investing $339 million in a factory in Poland, both of which include the manufacture of the battery cells.
Samsung SDI has said it will start production of batteries for electric vehicles in Hungary in 2018, establishing an integrated production system ranging from battery cells to packs.
Carlsson's company Northvolt is looking to rival the scale of Elon Musk's Gigafactory in the Nevada desert - targeting annual cell production equivalent to 32 gigawatt hours when the plant hits full gear in 2023.
Production would be largely automated but the factory could potentially employ 2,500 to 3,000 skilled people. The site would use cheap renewable energy and could source some key battery ingredients such as nickel, cobalt and lithium from within the Nordic region.
While the Tesla Gigafactory began mass production this year in partnership with Japan's Panasonic, Northvolt has yet to identify a site for its project which would require investment of at least 4 billion euros ($4.2 billion) over six years.
"I am very optimistic that we can attract both industrial investors as well as institutional investors," Northvolt CEO Peter Carlsson, a former head of supply chain at Tesla, said on the sidelines of a presentation.
"We hope to close the major investment in just over a year, but we have already begun talking to companies and institutions that could be leading players in the process."
So far a small group of investors including utility Vattenfall and Sweden's energy and innovation agencies have contributed funds allowing the firm to set up offices in central Stockholm and begin recruiting staff for the project.
Electrification has become a buzzword among automakers in recent years amid global concerns about climate change. Consultants CRU Group have said electric car and plug-in hybrid vehicle sales could hit 4.4 million in 2021 and more than six million by 2025, from 1.1 million last year.
Apart from servicing the automotive sector, Northvolt also sees business in areas such as energy storage and heavy industrial machinery.
"We are not going to fill the plant only with automotive. Not because we don't think it is possible, but we don't think it is a good idea to depend heavily on one vertical, and only one," said Northvolt Chief Operating Officer Paolo Cerruti, who also worked for Tesla in the past.
Carlsson said Northvolt had begun selecting a location for the plant and would start raising 50 million euros to fund a smaller-scale pilot line in the coming months.
Asked how Tesla chief Elon Musk viewed Northvolt's plans, Carlsson said: "We are not competing with Tesla because they are not going to sell batteries, but we do share a very strong vision which is that it is hugely important to accelerate our society away from its addiction to fossil fuels."