Amid indications that the United States is headed for protectionism, a European powerhouse for the production of batteries for electric cars might look especially appealing. Two former directors of Tesla (NASDAQ:TSLA) seem to think so – last week they announced plans to set up a $4 billion factory in the Nordic countries.

Peter Carlsson, who is Swedish and was the former supply chain head for Tesla until two years ago, told the Financial Times: “If nobody does anything, Europe is going to be completely dependent on an Asian supply chain. Europe has the opportunity to act for its own energy independence. It’s now or never.”

This will be Europe’s first big battery factory, rivaling Asian manufacturers at a time when climate risk is beginning to cast a shadow upon the perspectives and ambitions of large listed businesses with pre- 2 degrees of climate change business plans in the developed world, and everywhere else, too. The Financial Stability Board’s task force on climate risk is due to report very soon on its consultation on voluntary guidelines for business.

Today Mr. Carlsson is chief executive and founder of Northvolt, formerly known as SGF Energy. It is seeking to start producing lithium-ion batteries by 2020 and have 32 gigawatt hours (GWh) of annual production by 2023.

Both Tesla and Panasonic (TYO:6752) are currently building a 35GWh factory in Nevada, says the FT report.

It also stresses that this new business is not seeking to position itself against Tesla, although another of that company’s former executives –Paolo Cerruti, is now Northvolt’s Chief Operating Officer (COO).

“Battery power will enable us to be significantly more environmentally friendly in all we do. We are working to make a compelling business case for batteries over the full value chain” says Tom Johnstone, Chairman of Husqvarna (STO: HUSQ-B) and a board member of Volvo Cars, who is also an investor and industrial advisor for Northvolt-  on its website.

Mr. Cerrutti at Northvolt says, “I am very optimistic that we can attract both industrial investors as well as institutional investors. We hope to close the major investment in just over a year, but we have already begun talking to companies and institutions that could be leading players in the process.”

Given the strict carbon emissions standards imposed by the European Union, cars with batteries — either plug-in hybrids or fully electric cars — are set to play an increasingly important role in the European automobile market.

In an optimistic message to the industry, Northvolt’s website states: “There are strong indications that when the cost of lithium-ion batteries drops below $100/kWh, a number of user-sectors will reach an inflection point where traditional technology is no longer cheaper.”

To date, Asian companies — based in Japan, South Korea and increasingly also in China -control much of the global production of battery cells that are critical for electric cars. The fight is on.

Because the average price of lithium, the raw material used to make electric vehicle batteries, has risen dramatically, up 60 percent last year and threefold since 2014 according to an index by Benchmark Mineral Intelligence.

With electric car and battery costs falling towards mass-market prices, and demand rising for lithium use in off-grid power storage, the market faces a global shortage, it says.

According to one estimate by Morningstar, the supply shortfall will grow to 100,000 tonnes by 2025 and demand for lithium will increase by 16 percent each year until then.

Dina Medland is an independent writer, editor and commentator with a strong focus on issues around corporate governance, ethics, the workings of the boardroom and sustainable business. She is on the team of contributors to @ForbesEurope and is an ex-Financial Times staff member who has been a regular contributor in recent years. Further details about her background and a portfolio of work – including her commercially sponsored blog ‘Board Talk’ are available on her website