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Premium: 🔋 Northvolt and the benefit of understanding the future

The story of Peter Carlsson and Northvolt teaches us two lessons: You need to understand the future to see all the possibilities, and you must be an optimist to grab them.

Premium: 🔋 Northvolt and the benefit of understanding the future

Peter Carlsson was Head of Sourcing at Swedish-Japanese Sony Ericsson. You know, back when Ericsson was making mobile phones.

I had one of these.

He did an excellent job, so companies on the U.S. west coast sought his services. Among them was Apple, who offered him a job to lead the production of the iPad.

But he also went to a job interview at a small startup, yet to make a profit, who only had launched one product targeting a tiny luxury segment.

You might have heard of it? Tesla.

He said no to Apple, and joined the scrappy startup.

“When I walked out from building after visiting Tesla, I had a strong gut feeling that here – here things will really happen,” he says in the book Batterirevolutionen (Battery Revolution.)

His main task was to build up logistics for their next product, the Model S. It was still an expensive car, but one that was intended to show the world how amazing an electric vehicle can be.

Seeing the future of batteries

Tesla is not only an automaker. They are also an energy company, selling batteries to consumers, industries and governments, like the huge battery farm in South Australia.

During Peter Carlsson’s time at Tesla, they also planned and started construction of the enormous factory in Nevada, called Gigafactory. In 2018 it produced 20 gigawatt-hours of battery cells. And it is enormous. Fully built it will have the largest footprint in the world and the second-largest volume.

Elon Musk has said the world needs about a hundred of them.

“We actually did the calculations to figure out what it would take to transition the whole world to sustainable energy. You’d need 100 Gigafactories.”

My guess is that Tesla will attempt to build about half of them (we shall see on Tesla’s Battery Day later this year.) And Peter Carlsson will help build the other half.

During my time in the Swedish Parliament, Peter helped me set up a visit to the Tesla factory and headquarters in Fremont, California, but by the time I got there in early 2016, he had left the company.

In 2015, Carlsson left Tesla after a little more than four years, and later presented his idea of a large battery factory in Europe. He named his company Northvolt.

Naive pessimists

The naive pessimists lined up.

Great ambition, but where will he get the money?

To build a battery factory you need a lot of money—$ 4 billion to be precise.

He soon raised $10 million to get going, and not long after $1 billion more.

Northvolt chose the northern city of Skellefteå, Sweden as the location for the factory.

The naive pessimists lined up again, undeterred by being wrong about the financing.

An exciting project, but how are they going to build a factory up there?

The factory is now almost built, on time despite the pandemic, and will start producing battery cells early next year.

Northvolt One, Skellefteå, Sweden.

That factory is now called Northvolt One, because there will be more factories. Construction of Northvolt Two will begin in Salzgitter, Germany in 2021 and a third factory is being planned.

Northvolt has signed huge deals with Volkswagen and BMW to deliver batteries. They’ve partnered with industry giant ABB, and received funding from Goldman Sachs and the European Investment Bank.

It hurts to tell you, but the pessimists have been wrong again. They are so naive.

Two lessons to learn

The story of Peter Carlsson tells us two things

One: Understanding the future is the most valuable knowledge you can have.

Carlsson’s long experience with lithium-ion batteries from cell phones and cars, and the construction of the gigafactory in Nevada, helped him understand the future of batteries.

Two: We need more optimistic builders like Carlsson and Musk to make a better future come sooner.

To start with nothing, and propose building a huge factory costing several billion dollars is very brave. By nothing, I mean that Carlsson didn’t have a big company behind him or a couple of billion dollars of his own. The risk of failure is significant, and if you fail the pessimists will have a field day.

Earlier this Marc Andreessen wrote:

“Every step of the way, to everyone around us, we should be asking the question, what are you building?”

In a previous article I agreed with Andreessen and added this:

“Being optimistic about the future seems to be a big driver of actually building things. Science shows that optimistic people generate more ideas and are more open to the ideas of others.”
“But not only that, optimists are also more likely to take action on those ideas, and make something of them. Start a project, found a company, or something else that will make the idea into reality.”

A fact-based optimist

Peter Carlsson had the optimism to believe he could pull this off. That optimism was based on facts and knowledge about the future of batteries.

Peter Carlsson is a fact-based optimist.

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