By Kim Richters

Northvolt AB said Tuesday that it has raised $600 million from institutional and private investors to further expand its production and recycling capacities.

The Swedish battery maker said investors in the private placement include Baillie Gifford, Goldman Sachs's merchant banking division and German car maker Volkswagen AG, while private investors like Spotify founder Daniel Ek also participated.

The funding will be used to expand its production, recycling and R&D capacities, said the company, which targets 150 gigawatt-hours of manufacturing output in Europe by 2030, representing a 25% market share.

"We are in the middle of a race to establish manufacturing capacity in Europe, and I believe the companies that are best at attracting talent and capital, while scaling their blueprints the fastest, will be the most successful," Chief Executive and co-founder Peter Carlsson said. 



  Write to Kim Richters at kim.richters@wsj.com