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Northvolt’s battery factory in the north of Sweden in June.

Northvolt, a Swedish battery maker, has raised $2.75 billion from a host of big names to help fuel its global expansion and increase production.

The Stockholm-headquartered company makes the lithium-ion batteries that are used to power electric cars and it says it has signed deals worth $27 billion with the likes of BMW and VW. It is aiming to produce “the world’s greenest batteries” by drawing on renewable energy sources and recycled raw materials.

The latest funding round, Northvolt’s largest yet, was co-led by Goldman Sachs and VW alongside new investors including Swedish pension funds AP1, AP2, AP3, AP4 and Canadian pension provider OMERS. Previous investors such as Spotify CEO Daniel Ek and investment management firm Baillie Gifford are also investing in the round.

Total investment in the company now stands at $6.5 billion. The latest round of funding values Northvolt at $11.75 billion, according to a person familiar with the company who asked to remain anonymous as Northvolt has not publicly disclosed the figure.

Founded in 2016, Northvolt said it will use the funding to expand capacity at its factory in the far north of Sweden from 40 gigawatt-hours to 60 gigawatt-hours, which is enough to supply batteries for around 1 million electric vehicles. Production is expected to start at the factory later this year.

Peter Carlsson, co-founder and CEO of Northvolt, told CNBC in an interview on Wednesday that the company is doing “fairly significant shipments” from a smaller facility that has been in operation for over a year to customers who are now doing their own “validations.”

While none of the company’s batteries are in electric vehicles that are on the road today, they’re being used on test tracks, Carlsson said, adding that he expects Northvolt’s batteries to be delivered in vehicles from 2023 and in energy storage applications from the end of next year.

VW, which made a $14 billion order with Northvolt earlier this year, said Wednesday it has invested 500 million euros ($609 million) of the $2.75 billion and that its 20% stake in the company remains unchanged.

“With this investment, we are strengthening our strategic partnership with Northvolt as a supplier of sustainable battery cells which are produced using renewable energy and are comprehensively recyclable,” said Arno Antlitz, VW’s group board member for finance and IT, in a statement.

Northvolt’s batteries are built on a “different chemistry” to Tesla’s and the performance is becoming increasingly similar, said Carlsson, who was Tesla’s vice president of supply chain in Palo Alto between 2011 and 2015.

Making the batteries in a sustainable manner is one of Northvolt’s biggest challenges, he added. If the world transitions to electric vehicles with batteries from coal-based economies like China then it would create a new carbon footprint the size of Spain, Carlsson said. “If we do it based on renewable energy … we can prevent this from happening,” he said.

The company’s main plant is in Sweden and it is considering building a second in Germany if it can find enough renewable energy sources.

By 2030, it wants to achieve 150 gigawatt hours of deployed annual production capacity in Europe.

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