Europe’s largest lithium plant — a joint venture between battery maker Northvolt and Portuguese oil and gas giant Galp — is two years behind schedule.
Northvolt and Galp announced the 50-50 joint venture in 2021. It was originally aiming to process 32k tonnes of battery-ready lithium hydroxide a year, enough to produce the batteries needed to replace 400k combustion vehicles, annually, from 2026.
That’s now been pushed back to 2028, according to a document released by the European Investment Bank (EIB) in March, which is currently considering a €825m investment into the Portuguese facility. Northvolt’s latest annual report doesn’t state a planned production date for the facility.
In a statement to Sifted, Galp said it remains committed to the project, known as Aurora, but that access to national and European grant funding is not guaranteed and has contributed to the delays. It said that uncertainty over when the supply of Portuguese lithium will be ready has also hampered timelines. The project takes existing lithium and refines it into a battery-grade material.
Northvolt and Aurora did not respond to requests for comment.
Finding the funds
Last year, Northvolt estimated the cost of developing the refinery was around €700m. The original plan was for the plant to be jointly funded by Galp and Northvolt, but the Swedish battery maker told Sifted last year that it would also seek external debt financing.
The project had aimed to secure funding through the European Union’s Recovery and Resilience Plan (RRP) but, because the timelines for Aurora had been pushed back, it withdrew its request for that funding. The RRP only covers projects that will enter production by the end of 2026.
It’s now waiting on the outcome of the EIB’s decision.
Northvolt’s dreams and woes
Lithium is a crucial component of EV batteries and manufacturers around the world have fought to secure their supply of it.
Most lithium is sourced from South America or Australia and it’s nearly all refined and processed in China. The Aurora project is part of Northvolt’s wider ambitions to bring the battery supply chain to Europe, thereby isolating it from geopolitical risk.
The Swedish scaleup, which has raised $15bn in funding from the likes of BlackRock and Goldman Sachs, has been hit by a number of setbacks this year. In July, BMW cancelled a $2bn order from Northvolt after production delays.
The company this week announced a “strategic review” of its operations, which includes selling a Polish branch dedicated to building battery storage systems and laying off a number of its 7,000-strong workforce.
This article has been updated to reflect that the company is targeting 32k tonnes of batteries.
