Northvolt Purchases U.S. Startup Cuberg to Boost Battery Technology
This article orignally appeared in The Wall Street Journal.
William Boston – Swedish battery maker Northvolt AB has acquired U.S. startup Cuberg Inc., gaining access to technology that could significantly boost the range of its electric-vehicle batteries, in the latest move in a race between upstart battery makers and established ones to get a competitive edge.
The deal comes as Europe becomes a focus for the industry, with Asia’s big dominant battery makers competing against Europe’s homegrown startups to supply auto makers such as Volkswagen AG , Stellantis NV, BMW AG and Daimler AG with the batteries that will power millions of electric cars.
The terms of the acquisition weren’t disclosed.
To serve rising demand amid an EV sales boom in Europe, Northvolt, founded in 2016 by Swedish native Peter Carlsson, a former Tesla executive, is building a giant battery factory in northern Sweden, a second plant together with VW in Germany, and is looking for a site for a third plant that will also be built in Germany.
‘The scale-up of this industry and thereby the supply chains happened in Asia. And it’s about to happen in Europe and the U.S.’— Peter Carlsson, Northvolt’s founder “The Asians have a scale advantage,” Mr. Carlsson told The Wall Street Journal. “The scale-up of this industry and thereby the supply chains happened in Asia. And it’s about to happen in Europe and the U.S.”
Analysts say Northvolt will struggle to compete on scale with China’s Contemporary Amperex Technology Co. , Korea’s LG Chem Ltd. 051910 5.39% and China’s SVolt Energy Technology Co. These companies already have the integrated supply chains and financial power to fuel their global expansion. CATL is building a battery plant in eastern Germany, while LG Chem is expanding its production in Poland. SVolt, which has developed a cobalt-free battery, is building a plant in Western Germany.
Instead, they say, Northvolt should focus on developing technological advantages.
“It’s going to be very challenging for new entrants,” said Tim Bush, a battery analyst with UBS. “You’re going to need some kind of new disruptive technology.”
A battery factory is being built in northern Sweden by Northvolt to meet rising demand.
Cuberg has developed a battery cell that increases battery density—or the amount of energy a battery can store—but which can be integrated in existing large-scale battery manufacturing, enabling Northvolt to improve the range of its batteries with its existing production facilities. The extended range of the batteries enables an electric car or other vehicle to run longer on a single charge. And it means that fewer battery cells are needed to power a car, reducing the overall cost and increasing the number of cars that Northvolt can equip.
The Emeryville, Calif.-based company has mainly targeted the aviation industry until now and received backing from Boeing’s HorizonX venture-capital arm in 2018.
“Cuberg’s battery technology has some of the highest energy density we’ve seen in the marketplace, and its unique chemistries could prove to be a safe, stable solution for future electric air transportation,” Steve Nordlund, a Boeing executive, said at the time.
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Mr. Carlsson, the Northvolt founder, said he expects that the technology from Cuberg, spun out of Stanford University in 2015, will enable Northvolt to offer a battery with more than 70% more range than comparable lithium ion batteries, allowing Northvolt to grow faster and lower the unit cost of its batteries.
But the acquisition is also about future development. Cuberg will become the nucleus of a new Northvolt development center that aims to tap engineering talent in Silicon Valley to develop future battery technology. The company hopes to tap U.S. tech companies and universities for top-notch engineers.
“We will be pulling on a lot of academia,” said Richard Wang, Cuberg’s chief executive and co-founder.
Northvolt’s acquisition of Cuberg also highlights that the battle for brains is going to be one of the biggest challenges for car makers and their battery suppliers as the demand for developers and new battery technology intensifies.
“In the battery industry, there is going to be a war over competences,” said Mr. Carlsson, adding that Cuberg doesn’t yet have the “total secret formula” Northvolt needs. “But they are a bridge in our road map to get us from where we are today to where we need to be in 2030.”