STOCKHOLM -- Sweden's Northvolt has selected a site in the far north of its home country to build Europe's biggest battery factory to rival to Tesla's U.S. Gigafactory, as the company continues to seek the billions of euros needed to finance the scheme.
Northvolt and others are racing to set up large-scale battery cell plants in Europe, where automotive and industrial firms have so far relied mainly on Asian imports even as demand for EVs begins to pick up.
The decision on a site for the battery plant was the latest step toward realizing Northvolt's ambitious plans though it still has billions of euros in financing to secure.
South Korea's LG Chem said last week it will open Europe's largest lithium ion battery factory in Poland next year, employing 2,500 workers to produce up to 100,000 electric vehicle batteries per year.
Northvolt CEO Peter Carlsson said while the plant would be located in Skelleftea and would eventually employ 2,000-2,500 people, the main research and development operations would be set up in Vasteras, due west of Stockholm.
"If environmental processes and other permitting moves as planned, we will be able to put the shovel in the earth during the latter part of 2018 to build the first eight gigawatt hours," Carlsson told a news conference.
The location in the far north would leave the plant near Sweden's main cluster of mines and mineral resources in a region that is home to a large body of workers in industries such as metal-working and has ample energy capacity.
Northvolt said rail connections already serving other industries in the northern region, as well as Skelleftea's deep-sea port, meant it did not expect transport costs to be prohibitive due the plant's location.
Carlsson said Northvolt was in talks with several companies about sourcing of key battery ingredients such as nickel, cobalt and lithium but declined to set a deadline for when deals needed to be in place.
Former Tesla executive Carlsson's Northvolt wants the Swedish plant to rival the scale of the U.S. electric carmaker's Gigafactory in the Nevada desert, targeting annual cell production equivalent to 32 gigawatt-hours by 2023, which would make it far larger than LG Chem's Polish plant.
Northvolt needs at least 4 billion euros ($4.7 billion) in investments to realize its battery factory plans and is currently seeking to raise between 80 million and 100 million euros to fund a pre-production line.
"We are involved in a number of (financing) processes that we will be able to show the results of going forward," Carlsson said. "So, it is not something that keeps me up at night."