Intended to compete with the United States’ Tesla and Asian producers of lithium-ion batteries for electric vehicles, the factory located in Skellefteå in northern Sweden assembled its first electric cell “last night”, Northvolt said in a statement.

Once at full capacity, the site is expected to produce enough batteries to power one million electric vehicles annually, with an annual production capacity of 60 gigawatt hours (GWh), according to the firm.

“Today is a great milestone for Northvolt which the team has worked very hard to achieve. Of course, this first cell is only the beginning. Over the course of the coming years, we look forward to Northvolt Ett expanding its production capacity greatly to enable the European transition to clean energy,” Northvolt said.

Tesla is due to launch its first factory in Europe shortly and Asian rivals have significant operations in Poland and Hungary — but no European firm has yet operated a significant facility until now.

Northvolt, one of Europe’s leading battery hopefuls, has already secured $30 billion (26.5 billion euros) worth of orders from European car giants including Germany’s BMW and Volkswagen, and Sweden’s Volvo, with which it plans a second European factory.

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The new factory, dubbed “Northvolt Ett” (Northvolt One) in Swedish, already employs 500 people and will likely employ as many as 3,000 once it reaches full capacity.

The Swedish company, which has already raised funding of several billion euros, was founded in 2016 by Swede Peter Carlsson and Italian Paolo Cerruti, both former Tesla employees.

Its known shareholders include Volkswagen, Goldman Sachs, BMW, Nordic funds and, since 2020, the founder of Spotify, Swedish billionaire Daniel Ek.

In addition to private funding, Northvolt has also benefited from European loans, as the region plays catch-up in its electric vehicle production capacity.

Faced with China, which dominates the market, Europe accounted for just three percent of world battery cell production in 2020, but aims to corner 25 percent of the market by the end of the decade, with several factory openings planned.