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Investment In Battery Tech Exploded In 2020 – OilPrice.com

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Last fall Swedish lithium-ion battery maker Northvolt announced that it had raised $600 million in equity to invest in capacity expansion, research and development, and large-scale recycling.

The capital raise included institutional investors Baillie Gifford, Baron Capital Group, Bridford Investments Limited, Norrsken VC & PCS Holding together with private investors Cristina Stenbeck and Daniel Ek. It was joined by current Northvolt shareholders Goldman Sachs, IMAS Foundation, Scania, and Volkswagen AG.

The $600 million represented a substantial capital raise for a company that isn’t exactly a household name in the U.S., but Northvolt CEO Peter Carlsson had previously made clear the company’s intent to upend Chinese domination of the European market: “There’s a pretty significant export flow of used batteries to China, and that’s stupid. It’s important to keep these flows within Europe.”

Northvolt made the biggest deal in the battery space in 2020, but it was a huge year overall for the rapidly-growing sector. Mercom Capital Group, a global communications and research and consulting firm focused on cleantech, recently released its Q4 and Annual 2020 Funding and M&A report for the battery storage, smart grid and energy efficiency sectors.

Some of the key findings from the report include:

  • Battery storage, smart grid and energy efficiency companies brought in $8.1 billion in corporate funding in 2020, compared to $3.8 billion in 2019.
  • Corporate funding in battery storage was up 136% with $6.6 billion in 54 deals in 2020.
  • Global VC [venture capital] funding for battery storage, smart grid and efficiency companies in 2020 was 12% higher with $2.6 billion. compared to $2.3 billion raised in 2019.

The report noted that lithium-ion based battery technology companies received the most VC funding in 2020, with $649 million. But other storage categories also received funding, including solid-state batteries, energy storage downstream, energy storage systems, and flow batteries. Related: Goldman Sachs: Historic Copper Shortage Loom As Prices Rocket

Investor interest in the space is clearly on the rise. In 2020, 105 VC investors participated in battery storage deals compared to 78 in 2019. Breakthrough Energy Ventures was the top investor in 2020. Utilities and oil and gas companies were involved in four battery storage funding deals in 2020.

The report’s highlights also noted:

“In 2020, announced debt and public market financing for battery storage companies was up significantly with $5 billion in 22 deals compared to $1.1 billion in 10 deals in 2019. This is the highest amount raised in public market financing since 2014. Northvolt’s $1.6 billion and Plug Power’s $1 billion loan were the largest public market financing deals in 2020.

There were 19 M&A transactions in the Battery Storage category in 2020, of which two disclosed transaction amounts. A total of 24 battery storage and solar plus storage M&A transactions were announced in 2020 compared to 11 in 2019.”

To date, China has dominated the lithium-ion battery space. The country has a major advantage of cheap labor, plus China has more lithium reserves and greater lithium production than most countries. In 2018, Chinese lithium production was 7,500 metric tons, third among all countries and over eight times U.S. lithium production.

But some of the deals announced in 2020 represent an important shift in developing a robust battery industry that isn’t fully reliant on China.

A big part of this strategy is reflected by Northvolt’s investment in battery recycling. A recent IHS Markit Report noted:

“Large waves of end-of-life batteries (batteries at the end of their usable life) are set to begin this year, creating a sizeable repository of recyclable material. IHS Markit expects that over 500,000 tons (57 GWh) of batteries will reach their end-of-life point in 2020. That figure is expected to rise to 1.2 million tons (121 GWh) in 2025 and reach 3.5 million tons (350 GWh) in 2030—a seven-fold increase.”

With the world increasingly moving in the direction of electric vehicles, and with the expected explosion in the volume of batteries that need recycling, the significant investment in Northvolt seems to make perfect strategic sense.

By Robert Rapier

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

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Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

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The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

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This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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