Skellefteå is famous for gold mining, ice hockey and spectacular views of the Northern Lights, but soon, there will be something else. Nearby lies one of the most ambitious renewable energy projects in the world. Work is under way to build Europe’s largest lithium-ion battery manufacturing plant. Northvolt, a recent addition to Scottish Mortgage’s portfolio, wants to produce 25 per cent of Europe’s batteries by 2030.

Tom Slater: Could you take us back to the start of Northvolt?

Peter Carlsson: I’d stepped away from Tesla in late 2015, after almost five years launching the Model S and Model X. I joined some boards, and was happy, but realised I missed running a business.

The Paris Agreement had just been signed, pledging to keep global temperature increases well below 2C. Looking at Europe through my Tesla binoculars, I’d been talking to colleagues about how the European transport sector would have to go through a pretty significant transformation

and we began to think about the role that batteries would play. The more we discussed it with various groups, the more we realised this was too important not to try, and so we launched Northvolt in early 2017.

We selected Västerås for our research and development site for engineering skills and proximity to Stockholm and Skellefteå for our factory, for access to affordable renewable energy and land. Today, we have over 1,000 employees. It’s been a crazy story.

TS: How did you find getting things off the ground in Europe after the San Francisco Bay area?

PC: One thing I liked there – and miss – is the free thinking, especially about solving the world’s biggest problems. In Sweden, we have a concept known as jantelagen, which means not thinking you are better than anyone else, otherwise someone will put you back in your place. In the Bay, there’s a real freedom to think and dream big.

When we set up Northvolt, we wanted to think big, so we recruited globally rather than just locally. We now have about 70 different nationalities. A little challenging in establishing our culture, perhaps, but well worth it.

TS: What have you learned over the years about keeping a competitive edge?

PC: In Silicon Valley, I learned to be both passionate and a little paranoid. You always need to look out for what is happening. To be complacent is dangerous.

Our industry is growing so fast, it inevitably attracts a lot of competition. In Asia, we are competing against top notch players – the likes of LG, Samsung and Panasonic. In China, we’re up against ambitious, rapidly growing companies such as CATL and BYD Auto. And we definitely need to be on our toes.

Yet most of the ideas about the next generation of batteries are coming from US and European universities. Europe has a diverse environment for technological innovation and the chance to create unique and sustainable businesses.

TS: You’ve brought a sustainable element into your manufacturing process. What was the thinking behind this?

PC: We decided early on we would produce the active materials for making batteries in our own factories. Although this consumes vast amounts of energy, if we use renewable energy and make the batteries correctly, our factory carbon footprint will be almost zero. But we can’t make it zero, as we have to source some raw materials and components from suppliers.

TS: Could you talk a little more about other applications for batteries beyond passenger vehicles, and how important that will be to Northvolt?

PC: We think that vehicles will make up the largest part of the battery market, possibly 60 to 70 per cent, maybe more. But there are so many other aspects. The more electric cars we put on the streets, the more electricity we will need to charge our cars, and the greater the need will be to store energy [potentially in batteries] to supply the grid at peak demand.

We’re active in the mining industry, where contractors want to replace diesel engines with electric ones.  Boats, jet skis, snowmobiles – all of these will be electrified.

In my view, it will become less acceptable to consume oil just for the hell of it. I believe we’re just at the beginning of a new era.