ABB and Siemens are leading a €100mn fundraising round by Morrow Batteries, a start-up that aims to start producing in its home country of Norway by the end of next year.
Boosting investment in battery production has become an urgent strategic goal for Europe as it races to address the energy crisis and the shortage created by declining Russian gas supplies.
The region’s biggest battery makers include Sweden’s Northvolt, which raised $2.75bn last year and started production in December, and Norway’s Freyr, which went public last year through a merger with a listed company.
Morrow said it would use its funding to build a 1.2GW pilot factory by the end of next year, which will produce batteries used in energy storage systems such as those used for rooftop solar panels.
Chief executive Terje Andersen said this initial production would allow the company to obtain certification for producing electric vehicle batteries, which would ultimately become its main market.
“The market is huge,” he said, acknowledging that Morrow was two or three years behind larger rivals such as Northvolt. He estimates Morrow is in the top third of European battery groups. “We are not in the front, and we are not in the back,” said Andersen.
At present China is the world’s biggest battery manufacturer. However, new European trade rules will make it extremely expensive to import batteries from Asia from 2027, creating an opening for Europe’s homegrown battery makers.
Morrow’s €100mn fundraising is being led by Siemens Financial Services, a subsidiary of the German industrial group, and ABB, the Swedish-Swiss power conglomerate. Additional investors include the Norwegian state’s Nysnø Climate Investments and Arendals Fossekompani, a hydropower company and green investment fund.
Morrow previously raised €32mn from investors including Danish pension fund PKA and Agder Energi Venture, which both participated in the second round.
At present Morrow’s battery development line is in South Korea, and the company said it would relocate the production to the new factory in Arendal on Norway’s southern coast.
Global shortages of cobalt and nickel are threatening to push up the price of electric vehicle batteries, prompting some manufacturers to invest in technologies that use less of these materials.
Andersen said the company was planning a battery that had no cobalt and used significantly less nickel. “We will replace nickel and cobalt with manganese. This is what the EV producers are keen to discuss with us.”