Northvolta Swedish manufacturer of batteries for electric vehicles, announced this Thursday that it will declared bankruptcy. This decision “will allow the company to restructure its debt, adapt its business to the needs of its customers and guarantee a sustainable basis to continue operating,” the company said in a statement, adding that its activity would continue as normal.
He did it in the United States since the protection of his assets is more favorable to him on the other side of the Atlantic. Thus, this move allows it to access $145 million in financing, guaranteed with its assets, and $100 million in customer financing.
From hopeful pioneer to fighting for survival
Northvolt has been looking for investors for several weeks to help it refinance in the short term and avoid permanent bankruptcy. The group expects to complete its restructuring by the end of the first quarter of 2025, and in the meantime will evaluate “investment proposals” from “strategic and financial” investors, as well as its current shareholders and clients.
In a matter of months, Northvolt went from being the best european asset to free itself from dependence on Chinese and Asian batteries for electric vehicles, with gigafactories planned on both sides of the Atlantic, to a company struggling to stay afloat, weighed down by production problems, the loss of a major customer and the lack of financing.
A end of septemberannounced the elimination of 1,600 of its 6,500 jobs and the freezing of the development of its main production center in Skelleftea, in northern Sweden, to adapt to its tense financial situation. Besides, BMWone of its main shareholders, has canceled a contract of 2,000 million euros. Northvolt did not seem capable of manufacturing the battery requested by BMW either in terms of quality or quantity.
Although this procedure does not mean bankruptcy, it is essentially an expanded bankruptcy to avoid the liquidation of the company, the prospects for recovery of the electric vehicle market for the chemical NMC (nickel manganese cobalt), the favorite of European brands for its higher energy density, are unlikely. Manufacturers now prefer LFP (lithium iron phosphate) chemistry, which is less energy dense but much cheaper.
Founded in 2016 with Peter Carlsson, a former Tesla, at the helm, Northvolt was considered one of the great European hopes in terms of batteries at a time when Europe is trying to catch up with the Asian, Chinese (CATL, BYD) and Koreans (LG) in particular.
But the group has accumulated production delays in recent months and has decided to reorient its activity solely towards the production of battery cells, abandoning the rest of the production chain (cathodes, recycling, etc.).
He principal shareholder de Northvolt is the German automobile manufacturer Volkswagen (21% share) and that also going through difficultiesbut German giants such as BMW and Siemens also participate in the company.
Las hopes of europe to be able to get rid of Asian dominance in the field of batteries now fall on the French ACC (Automotive Cells Company). This still has the support from Stellantis, Mercedes-Benz and TotalEnergies. However, the company is also suffering the consequences of a nascent industry. Cell production remains limited.
Last September they reached 1,500 modules, the equivalent to equip an average of about 140 electric cars. This year’s total production should make it possible to equip around 2,000 cars, including the Peugeot E-3008 and E-5008, as well as the electric Opel Grandland.
This has caused the suspension of investment projects in Germany and Italy. ACC’s initial goal remains to equip 15% of electric cars in Europe by 2030.
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Source: www.motorpasion.com
