Northvolt, a founder-led company that’s been making waves in the electric battery industry would be an enticing prospect on the stock market. The Swedish company is capitalising on the growing demand for cleaner, more efficient energy sources and is seemingly going from strength to strength.
It would be an opportunity to invest in a company that’s projected to deliver accelerating revenue growth in the coming years. It’s also a chance to diversify your portfolio with a non-US and non-UK stock, while betting on the potential superiority of their sodium-ion batteries over existing lithium-based technology.
But, investing in Northvolt isn’t straightforward as the company isn’t publicly listed.
But don’t worry, I’m here to guide you on how you might still get a piece of this promising pie. Let’s take a look at how…
Understanding Northvolt Stock Investment
Investing in a company like Northvolt directly, at the time of writing is not possible. Since they’re not currently publicly listed, there’s no way to directly invest in the Swedish battery firm.
Firstly, although Northvolt isn’t able to be traded on public exchanges right now, that doesn’t mean it’s impossible for individuals to potentially invest.
Private markets like Upmarket offer potential access to pre-IPO shares and for high net worth individuals it may be possible to invest pre-IPO on platforms such as Forge Global. Remember: investing always carries risks, and that’s especially true in the early stages of a company’s growth.
Secondly, keep an eye out for news about Northvolt’s Initial Public Offering (IPO). It’s clear there’s a vast potential size for the IPO given the buzz and the number of European firms recently opting to float in the US. The company’s choice of exchange is going to catch a lot of attention and scrutiny.
They’re entertaining all options right now – even a dual listing isn’t off the table. However, they did secure funding for $5 billion in January 2024 in the form of a green loan deal – the largest of its kind – so that could well delay any possible IPO in the short term.
Finally, Northvolt’s Investor Relations team, headed up by Andreas Pettersson Rohman, is aiding the firm. They’re potentially handling IPO-related matters, which could hint at the firm’s serious considerations for becoming publicly listed. While it’s speculative at present, it gives some hope for potentially adding Northvolt to our investment portfolio.
Overall, patience and diligent observation of the market trend would be the most viable strategies at the moment. Meanwhile, exploring alternative routes, such as private markets, could offer potential avenues for investment in Northvolt, albeit with additional risks to contend with. You could also consider ETFs that have exposure to Northvolt products.
When Will Northvolt Publicly Traded Status Apply?
As mentioned above, this is still open to interpretation and any timeline we offer right now would be a speculative guess.
When will Northvolt IPO?
I cannot guarantee an exact date at this moment; but, despite the $5 billion fundraise, Northvolt may be getting closer to solidifying their decision. They recently announced a new 60GWh battery gigafactory and are currently in a steep growth curve.
This potential move was indirectly indicated by hiring investment banks.
Also, global events such as economic uncertainty, inflation, and war can dial back or accelerate IPO strategies, a predicament Northvolt isn’t alone in exploring.
Northvolt’s current valuation hovers around 11 billion Euros, but rumours say that an IPO could bump the valuation up to an estimated 20 billion. This significant value increase waiting in the wings suggests that the company could present enticing opportunities for investors once the action heats up.
With the launch of an IPO, there come regulatory prerequisites that could provoke the company to release essential financial information and this could be another factor against an IPO.
Financials and IPOs
IPOs play an advantageous role in disseminating essential snippets of a company’s performance through financial statements. By observing these reports, investors can craft data-driven investment strategies. In contrast, pre-IPO investing typically offers limited financials, restraining an investor’s ability to make all-informed decisions.
IPO Performance: A Game of Patience
Experience has shown that high-demand companies’ IPO stock prices often rise, making an early entry, and a smart exit could yield considerable profit. Patience plays an important role in exploring these economic shifts and changes.
In 2021, for example, both Rivian and Robinhood became high-flying IPO stocks. But, merely six months later, their stock prices plunged to 80% below their peak price.
It’s important to remember not to rush into buying overvalued shares immediately following the IPO. These shares can depreciate due to factors like lockup expirations and disappointing quarterly earnings.
On the other hand, consider that the most disruptive companies often see their value grow over a more extended period. Adopting a long-term focus and practising patience could reward you in the end.
So, while Northvolt’s IPO chances may not yet be carved in stone, keeping an eye on their moves and the wider market could be a smart strategy.
How to buy Northvolt stock
As Northvolt’s Initial Public Offering (IPO) isn’t imminent and is certainly not yet earmarked on the 2024 IPO calendar, you might decide to explore potential alternatives to capitalise on this market opportunity right now.
Several key players in the electric vehicle (EV) battery space like Tesla, QuantumScape, and BYD present exciting investment possibilities. To get started, opening a brokerage account is a good starting place.
Tesla
Tesla, with its established dominance in the EV market, is a sensible starting point. The founders of Northvolt actually left Tesla to form their company – and it could come full circle if Tesla decide to embrace their current employees tech.
Tesla isn’t just a frontrunner in producing EVs, but it’s also a trailblazer in the area of battery technology and solar panel production. They’ve been known to invest significantly in enhancing battery manufacturing capacities across Europe and the United States.
For example, their groundbreaking 4680 battery cell design, touted to cut manufacturing costs by over half could prove very profitable if it makes it to market.
No doubt, Tesla presents a formidable opportunity for investors keen on the EV battery trend and could be a good alternative to Northvolt.
QuantumScape
Delving deep into battery companies, I’d like to highlight QuantumScape.
Backed by industry titans like Volkswagen and investor Bill Gates, QuantumScape has primed itself as a significant player in the research and development of batteries. Even though not yielding revenue yet, their keen focus and dedication are enough for wise investors to give heed.
A quick note, their diligence towards developing superior batteries, designed for utmost safety, swift charging, and long-lasting use, could be worth taking an interest in as an alternative to Northvolt.
BYD
Another captivating option lies in BYD, a major electric vehicle and battery developer.
Known for their lithium-ion batteries, BYD presents a firm foothold in the battery sector. The company’s reputation in battery-making, coupled with their status as an EV manufacturer, can present a viable alternative for those keen on the EV battery industry – and they also have some pretty high profile investors which could instill more confidence.
Open a Brokerage Account
All these fascinating possibilities bring us to the practical side of things: actual investment. Acquiring shares in any of the mentioned alternatives, or any other stock for that matter, requires a brokerage account. Here’s a simple guideline to get you started:
- Set an investment budget post opening and funding your account.
- Research your chosen stock extensively.
- Proceed to the brokerage account order page and enter the required details: number of shares or the sum you’d like to invest, the stock ticker (e.g. TSLA for Tesla), and the type of order, limit or market.
I often recommend using a market order as it guarantees immediate purchase at the market price. You fill out your order, submit the trade, and voilà: you’re a shareholder in the booming EV battery market.
While we wait for Northvolt’s IPO, these alternatives allow you to venture into the promising world of EV batteries, giving you a head-start even before Northvolt goes public.
ETFs with exposure to Northvolt
If you’re interested in gaining indirect exposure to Northvolt before its anticipated IPO, Exchange Traded Funds or ETFs might be just the ticket. ETFs hold a broad variety of investments, including stocks, bonds, and commodities. This means they provide diversified exposure to a particular industry or sector.
Northvolt isn’t publicly traded yet, so it’s relatively complex to find an ETF with direct exposure to the company’s equity. But, consider ETFs that are focused on the EV and battery industry. Given that Northvolt is a significant player in this arena, any advancements and overall growth in the industry should likely positively impact Northvolt’s performance.
For instance, there’s the Global X Lithium & Battery Tech ETF (LIT), a fund that tracks the performance of the lithium industry. With the growing demand for EV batteries, lithium is a key raw material and this fund could provide an indirect association with Northvolt.
Or take the Invesco WilderHill Clean Energy ETF (PBW), which invests in companies in the clean energy and green industries. As Northvolt positions itself in the renewable energy business, this fund may overlap with Northvolt’s interests.
Remember, the key is to assess the holdings of these ETFs and their respective sector focus. A good way to start is by looking at their top holdings and how correlated they are to the EV and battery market.
Bear in mind that investing in any financial instrument comes with risks. It’s critical to make informed decisions and consider potential fluctuations in the market. You should always do your own research or consult with a trusted financial advisor.
Investing in ETFs allows you to purchase shares through a brokerage account, similar to buying individual stocks. It is an option worth considering to gain access to this rapidly growing industry.
Seeing the growing demand and the advancement in the EV industry, it appears to be an exciting time to explore investment opportunities. As for Northvolt, while we stay tuned for its IPO, indirect exposure via ETFs might provide a sound financial strategy.
Invest In Northvolt?
Let’s dive deeper into understanding Northvolt and its significant strides in the EV battery manufacturing industry. First, we’ll begin by trying to gain a further understanding of what Northvolt is and what it does.
Company Overview
Northvolt, a swiftly growing private EV battery manufacturing company, is making remarkable progress in the race to build EV batteries that don’t require critical materials.
The company initially worked on manufacturing processes for lithium-ion batteries – now it has engineered technology that produces sodium-ion batteries on a large scale, in collaboration with Altris.
The introduction of this sodium-ion technology brings about added sustainability benefits as it steers clear of critical materials.
This breakthrough technology could mean that Northvolt is a sound potential investment opportunity. Here are a few reasons that might make you want to invest in Northvolt’s upcoming IPO:
- The opportunity to join a company that is seizing the monumental electric battery market.
- The prospect of investing in a founder-led company.
- The belief that Northvolt could deliver surging revenue growth in the forthcoming years.
- The idea that in due course, the company will breakeven.
- A conviction in Northvolt’s superior sodium-ion battery technology over the extant lithium-based batteries.
- Diversifying your portfolio with a non-US stock addition could be advantageous.
Northvolt’s recent advances and potential, place it alongside significant competitors such as QuantumScape Corp – a lithium-ion battery focused startup, backed by significant stakeholders like Volkswagen and investor Bill Gates.
Another key competitor is LG Energy Solutions – a Seoul-based lithium-ion battery developer with a market cap of 87.05 billion. The firm went public at the onset of 2022, marking the largest IPO in South Korea’s history to date.
Financial Performance, Valuation & Possible Stock Price
Financially, Northvolt’s choice of exchange garners much attention given the size of its potential IPO and considering the recent trend of European firms opting to float in the US.
The proposed dual listing could entail extensive work for Northvolt’s finance team, who are currently striving to scale growth.
Andreas Pettersson Rohman, along with other investor relations team members, has assisted Northvolt in raising £8bn from various sources such as car manufacturers, pension funds, banks, and even private investors like Spotify founder Daniel Ek and Swedish billionaire Cristina Stenbeck. The value of the company was last estimated at £11bn in 2021.
At this point, the valuation of Northvolt is a critical factor whilst considering its IPO. The aim is to seek the market that might result in a better valuation. But, the decision could involve various considerations for the company.
Evaluating Northvolt Stock As An Investor
No investment is foolproof, particularly in an industry as competitive and rapidly developing as electric vehicle battery production. To make informed decisions, investors must peruse potential growth scenarios and be aware of the challenges Northvolt might confront.
Growth Potential
Based on the facts, Northvolt has exhibited promising growth. A remarkably successful fundraising campaign garnered £8bn in funds for the company).
The generous flow of funds originates from a diverse group of contributors, including car manufacturers, pension funds, banks, and noteworthy private investors such as Spotify’s founder and a Swedish billionaire, and most recently the $5bn green loan deal they secured. This broad, robust financial backing underscores faith in Northvolt’s growth potential.
Market demand is a crucial driver of Northvolt’s advancement. It’s undeniable that the electric battery market is expanding. The recent transition to sodium-ion batteries, underlining the firm’s commitment to sustainable progress, positions Northvolt at the forefront of the sector – and if this technology is widely adopted it could be transformative.
This innovative shift sets it apart from many rivals and reinforces its foothold in the market.
Risks and Challenges
But, investing in Northvolt shares does involve some uncertainties. Given the size of Northvolt’s potential IPO and the scrutiny from European firms favouring American exchanges, the choice will be pivotal and widely watched.
Northvolt is yet to decide its course, with options ranging from a coveted dual-listing, which could imply additional effort for the small finance team, to seeking an exchange which might offer a favourable valuation.
It’s a delicate balance, as any strategic steps towards scaling and growth must coexist with these IPO-related considerations.
Closely connected to these IPO uncertainties is the general volatility of IPO markets. Should Northvolt opt for a public listing in the near future, it will need to do so in a world that is highly sensitive to global economic trends and fluctuations.
The company’s broader challenges include maintaining its growth trajectory and managing the transition to sodium-ion technology while simultaneously scaling up production to meet escalating demand. Each of these tasks involves its own set of hurdles, and managing them concurrently will be a complex feat.
To conclude, while Northvolt’s potential makes it an enticing investment prospect, some risks must be taken into account – not least the unknowns around sodium battery take-up globally.
Conclusion
Northvolt’s journey has been remarkable and it’s an exciting time to consider investing in its stock.
The company’s successful fundraising efforts and the projected IPO are indicators of its strong financial health. It’s crucial to stay updated on the IPO and market conditions. This way, we’ll be ready to make a well-informed investment decision when the shares become available.
It’s also worth comparing Northvolt’s performance with similar companies to gauge potential returns. Remember, investing is a strategic decision that requires careful planning and consideration.
Frequently Asked Questions
Who does Tesla buy lithium from?
Tesla obtains lithium from various suppliers, not relying on just one. Its lithium resources were significantly amplified at the end of 2021 when a three-year supply agreement was signed with China’s Ganfeng Lithium, a noted lithium producer. Other major mining firms such as Livent and Albemarle also have supply agreements with Tesla.
Is Northvolt a good company?
Based on 521 anonymous reviews, Northvolt has a respectable overall rating of 3.9 out of 5. A substantial 77% of surveyed employees would recommend working at Northvolt to a friend, with 73% holding a positive business outlook. Impressively, these ratings have increased by 11% over the past year.
Can I buy shares in Northvolt?
As Northvolt is not currently a publicly-traded company, shares are unable to be bought through brokerage accounts.
Who is the CEO of Northvolt?
The CEO and Co-Founder of Northvolt is Peter Carlsson.