Gamla Brogatan in Stockholm on October 19, 2017. Northvolt presents its plans, from left: municipal councilor Anders Teljebäck, Västerås, Peter Carlsson, then minister for enterprise and innovation Mikael Damberg, and Skellefteå municipal councilor Lorents Burman.
We meet in an office located inside Northvolt One. The management, which have their own storage boxes for items such as helmets and reflective vests at the entrance, often operate from this office during visits to Skellefteå.
October 19 marks six years since Northvolt announced the decision to locate the first factory, Northvolt One, in Skellefteå and the research unit, Northvolt Labs, in Västerås. The meeting has been planned for months. The reason is that King Carl XVI is visiting the country the day after.
In September, Norran reported that Northvolt Ett would have sales of 131 million kronor in 2022.
Carlsson acknowledges that Northvolt is growing.
– It is intensely busy. Right now we have a lot of customer deliveries and a lot to scale up. We are slightly behind plan in terms of production, but at the same time, I see Mark (Duchesne, CEO of Northvolt Ett) and the team solving problem after problem. It was never in the plan that we would produce large volumes this year, but next year we have to ramp up to almost half the capacity here.
Where do you want to be in 2025?
– The whole 16 GWh, with some flexibility, should be fully operational by then. We need to get the lines up to the parts per minute level, that we need. We have taken steps, but we are not quite there yet. It's fine-tuning, fine-tuning and more fine-tuning," explains Carlsson.
The Northvolt Ett site is now so huge that some journeys are easier done by car.
The first two of five production blocks are currently in the start-up phase. Each unit has four production lines. In total, the production of these two blocks amounts to 16 GWh out of Northvolt Ett's total planned production of 60 GWh.
– We have a little too much downtime on the production lines. These are teething problems that we're working on with the equipment supplier. Some of it is related to the fact that we have a lot of new personnel, but there is also a need to establish better preventive maintenance and stability in certain parts of the production process.
Northvolt's CEO, Peter Carlsson, is spending a lot of time at Northvolt Ett. "I have regular running routes here, manage to play a bit of padel tennis and probably sleep more at Disponenten than at home," he says.
Carlsson mentions that 'a lot of cells' are now entering the final part of the process, 'formation and aging'.
– It is a giant logistics system that we are trying to optimize. Formation and aging is like a semiconductor factory. If you overload it, lead times go from 14 days to 30 days. If you try to rush batches through, you also get bottlenecks.
The foundation plate for the largest building planned at Northvolt One, Upstream 2, a building of about 40,000 square meters, has now been initiated.
– But we will wait a bit before we start the whole construction. We want to see how Upstream 1, with the first two production blocks, develops.
We have had some teething problems, and we really want it to work in Upstream 2, which is three times the size.
"We have a bit too much downtime in the production lines. It's teething problems that we are working on with the equipment supplier," says Peter Carlsson.
Northvolt Ett is growing every day.
– We currently have 4,700 people on site, of which 2,200 are employed by Northvolt The others are contractors. We will increase to about 8,000 people (including contractors) within 1-1.5 years. This will absolutely be the peak in terms of the number of people, says Carlsson, who is very concerned about how Skellefteå will handle this number of new people.
– When you consider the housing situation and the fact that more and more of our people are moving here, it puts an extra strain on the system. And house building is currently practically non-existent. It's a headache.
SEE MORE: Norran broadcasted live from the press conference in Stockholm at the announcement about Northvolt's establishment in Skellefteå. Watch the first interview with Peter Carlsson below:
When the site is at its peak, Carlsson estimates that Northvolt One will employ between 3,000 and 3,500 people.
His concern about the lack of residential development in the area is palpable.
– We have monthly meetings with the municipality. There is a good dialogue, but I also feel that they don't seem as concerned as we are. I can say that Kristina (Sundin Jonsson, CEO) and Lorents (Burman (S), municipal councillor) understand our concern, but the municipality as a whole needs to show a greater sense of urgency around these issues. These are fundamental problems that need to be solved if this is to be a success.
If the situation doesn't improve, what will happen?
– Eventually we won't have enough employees, because people won't be able to move here. Then we will have to think about how to proceed from there.
Are you worried that you won't reach 60 GWh because people can't find housing?
– I am absolutely worried about that. We already have 500 employees living in some kind of temporary housing, from barracks to basements, to summer cottages. At the same time, we're adding at least 100 staff a month, but we don't see the construction of residential buildings to support that. At some point, the situation will become unsustainable.
"Considering the housing situation and the fact that more and more of those we hire are moving here, it adds an additional strain on the system, while the start of housing construction is practically non-existent. It's a headache," says Peter Carlsson, CEO of the Northvolt Group.
– There are a lot of land allocations that are not being built on yet, where you probably have to be a little tough and demand they start building if they want to retain possession of the land. We also have to find more temporary solutions, and here we have to be flexible. I understand that you don't want to build a temporary city, and instead want a sustainable Skellefteå, but it's a headache, says Carlsson.
Northvolt is currently running a campaign called 'Help our Northvolt workers find homes', where they are looking for rental housing.
– I would really like to ask all Skellefteå residents who have an extra apartment, or any spare accommodation, to get in touch with us to see if we can put them in touch with a Northvolt employee. There are many operators and maintenance personnel who can't afford to rent a three-room apartment for 20,000 kronor a month. It's absolutely true that many subcontractors and others have rented houses and paid Stockholm rents, but that doesn't work for our staff operators; they need to find normal cost-effective accommodation.
"Skellefteå is and will continue to be the mother factory. The products we make here in Skellefteå will be the blueprint for every other plant, as will the factory design," says Carlsson.
Recently, Västerbotten county governor Helene Hellmark Knutsson convened a meeting with housing stakeholders in Västerbotten "to enable the necessary housing construction in Västerbotten".
– I know that the municipality and the government are looking into this, and I know that a lot of it has to do with interest rates, increased construction costs, and financing issues.
But Carlsson says that something has to happen - and soon.
– We need something to get this going. It needs to start in the fourth quarter of this year or the first quarter of next year. We need at least 1,000 homes by 2025. Right now there is almost nothing. As it is now, there will be a little more by the end of 2023 and some in 2024, but nowhere near as many as we need. Construction should start pretty much now so that the houses will be ready by 2025.
In parallel with Northvolt Ett, the Northvolt group is now building other factories in Heide, Germany, Montreal, Canada, and the Novo cooperation project with Volvo in Torslanda, Gothenburg.
– Skellefteå is and will continue to be the mother factory. The products we make here in Skellefteå will be the blueprint for every other plant, as will the factory design.
In Northvolt Ett's annual report, the goal was clear: "The group aims to achieve a market share of approximately 25 percent in Europe by 2030, which is estimated to be equivalent to a production capacity of approximately 150 GWh.
– This is where our customers' needs lie. This is a large industry; to be relevant and responsive to customers, you need a plan like this. We are very transparent with customers, but we also have loyalty. There are very good products coming out, and they are world-class, as all our customers unanimously say. That's something we're proud of, says Carlsson.
Peter Carlsson is very worried that societal development is not keeping pace with the growth of Northvolt Ett. "We don't see enough signs of residential construction," he says.
How have financing costs increased over the past two years?
– Certainly we have been affected by higher interest rates. We have raised more venture capital, and basically we have strong support from credit institutions and others who support this, which gives us a good interest rate structure, but of course we also feel the impact of interest rate increases - no doubt about it.
– In terms of going public, we are working on getting the company ready. It is about everything from our reporting to when it is optimal based on the business and when the financial market is positive. Right now, it's not the right time, so we'll see what happens in 2024 if there are opportunities.
Finally, how much do you travel now?
– For me, Skellefteå is the morning flight up, but I have practically set up my office here now. If I'm not in Montreal or visiting customers, I'm here. I'm almost never in Stockholm.
Skellefteå is my new home.