Plans by Swedish industrial entrepreneur Lars Carlstrom to build a $4bn battery gigafactory in California have taken a key stride forward with the signing of a letter of intent between his new company Statevolt and local outfit Controlled Thermal Resources (CTR) for the supply of lithium and geothermal-sourced power to run the facility.

Fully operational, the gigafactory – to be constructed at a yet-to-be-finalised site in Imperial Valley in the south of the US state – promises to be one of the largest in North America, with a production capacity of 54GWh of lithium-ion (Li-ion) batteries a year, equal to the demand from 650,000 electric vehicles (EVs).

“The development of Li-ion batteries is crucial for the US to meet its goals to transition to net zero. Statevolt is proud to begin its journey to develop US expertise and production of Li-ion batteries, as we look to serve this critical market,” said Carlstrom.

“Today, we face a significant shortage in the amount of lithium that is required to meet the demand for EVs. We are pioneering a new, hyper-local business model, which prioritises sustainability and resilience in the supply chain to solve this issue.”

Carlstrom, who is also developing a battery gigafactory in Scarmagno, Italy, via his Italvolt business, added: “Through the construction and development of Statevolt, we will support the nation's energy transition while retaining a keen focus on low-cost, sustainable battery manufacture.”

Rod Colwell, CEO of CTR, said: “The extraordinary growth in electric vehicle adoption and the emerging demand for energy storage systems to provide clean power, highlights the urgent need to develop a strong and secure battery supply chain in the US.”

Statevolt said it was currently undertaking due diligence to determine the “best location” for the gigafactory, for which lithium and power would be supplied by CTR’s operational Hell’s Kitchen complex. CTR has worked in the Imperial Valley geothermal sector for over 30 years.

The tie-up is is pioneering what it calls a ‘hyper-local’ sustainable business model for Li-ion battery development in the US, with the project sourcing all key feedstock, lithium, and its power from local resources.

“[This model will] minimise the environmental impact of production and build a more sustainable and secure supply chain,” said the partners, “[and] simultaneously it will help facilitate the development of a micro-industry in the area, delivering up to 2,500 direct jobs for Imperial Valley and the region more widely.”

Global lithium demand for EVs and storage applications is set to reach 383 kilotons by 2030, according to International Energy Agency forecasts. In the US, the Biden administration is targeting half of automotive sales being EVs by this date, making the rapid development of batteries and supply chain resilience will be crucial to meet consumer demand, in the near-to-medium term.