Partners Plan Giant EV Battery Plant in Europe

Two former executives at Tesla Motors Inc. aim to build a $4 billion factory in Scandinavia and begin making batteries for electric cars in 2020, the Financial Times reports.

The newspaper says the partners—CEO-founder Peter Carlsson and Chief Operating Officer Paolo Cerruti—plan to announce their Stockholm-based scheme on Tuesday.

Their two-year-old startup, NorthVolt AB (formerly SGF Energy), targets annual production of 32 gigawatt-hours of battery capacity by 2023.

The two entrepreneurs say Europe “needs to do something” to combat the near-monopoly on EV batteries currently held by companies in China, Japan and South Korea. They envision NorthVolt as a vertically integrated, engineering-oriented company that taps such Scandinavian resources as cobalt and nickel mines and wind and water power generating capacity.

Carlsson concedes that financing is the venture’s biggest challenge. The company is backed by Sweden’s Stena conglomerate, Vattenfall electric utility and the Swedish Energy Agency.

The company insists it won’t compete with Tesla, which is ramping up battery production at its $5 billion “gigafactory” in Nevada. The facility is expected to have enough annual cell-making capacity by 2018 to power 500,000 Tesla EVs, according to Tesla. The company said two weeks ago it will announce details about three more gigafactories by the end this year.