Setback for Europe’s battery ambitions as Northvolt files for Chapter 11 bankruptcy protection
European battery company Northvolt has filed for Chapter 11 ‘reorganisation’ bankruptcy in the US, which it said will allow it to restructure its debt to continue scaling the business.
Northvolt is Europe’s most-funded homegrown lithium-ion battery company and has attempted to set up manufacturing and battery material projects across the continent and North America, but has struggled to scale up production and has neared the end of its cash reserves.
The Chapter 11 process, announced last week (21 November) will allow it to access US$145 million in cash collateral and US$100 million of debtor-in-possession (DIP) financing, and it will seek new investment opportunities from strategic and financial investors, as well as existing lenders, shareholders and customers. It was filed in the US Bankruptcy Court for the Southern District of Texas.
CEO Peter Carlsson, who co-founded the company in 2016, will step down as CEO while remaining as member of the board and a senior advisor. The firm was set up amidst a political push by Europe to establish its own electric vehicle (EV) battery industry to reduce reliance on China, which dominates the market.
The big three macro-economic challenges the company has faced are higher interest rates, an EV demand slowdown and increased competition from US and China, while commentators have blamed its management for a slow scale-up in battery production, which has seen it lose agreements with EV manufacturers.
Its three largest shareholders are automotive OEMs Volkswagen and BMW and investment bank Goldman Sachs, but its shareholder base is large and varied and includes Swedish state-owned power generation firm Vattenfall, engineering firm ABB, large vehicle OEM Scania as well as pension funds.
The company reportedly needs another US$1 billion to continue its business long-term. It currently has around 7,000 employees.
Non-core businesses sold or closed down including ESS unit
The company will continue to make deliveries to customers and pay wages to employees and operations are continuing at its flagship battery gigafactory in Skellefteå, Sweden, Northvolt Ett, and its Northvolt Labs in Västerås.
Northvolt primarily targeted the EV battery segment, with its first big customer being Scania, but has also entered the ESS space with a facility in Poland.
However the firm’s numerous non-cell projects are now on hold or being divested, following a strategic review this year from which it decided to sharpen its focus to battery cell production only.
In August, it closed a US project aimed at manufacturing high-performance lithium metal cells, via subsidiary Cuberg, and that site in California was recently acquired by lithium-sulfur battery startup Lyten Energy. The company has also sold or closed down its cathode active material (CAM) facilities in Sweden and will instead buy CAM from established suppliers.
Meanwhile, the company has shut down its energy storage system (ESS) assembly plant in Poland after failing to find a buyer for the business, which has 281 employees, and it will now seek a buyer for the physical factory. A separate Northvolt business based in Poland and Sweden, under the same Northvolt Systems subsidiary, which manufactures ESS units for industrial applications will now enter a sales process. Around 600 employees are employed by Northvolt Systems in total.
Northvolt’s VP communications discussed its stuttered scale-up in an interview with Energy-storage.news in March 2024 (Premium access).
‘Setback for Europe’s EV battery ambitions’
The news has provoked strong debate in the battery industry, including on business networking site LinkedIn.
Some have pointed the finger at the company’s management team and various decisions including choosing to launch projects covering the spectrum of battery cell manufacturing (in several markets), CAM production, recycling, ESS assembly and new battery technology research, before it had mastered cell production in its first facility.
Others have attributed the company’s struggles to the wider macroeconomic factors mentioned before, particularly the staggering capacity expansion and price falls coming from China’s lithium-ion battery industry, which dominates the market. Some in that camp still praise Carlsson and Northvolt for establishing Europe’s EV battery ambitions, even if Northvolt is not the one that goes on to lead the charge.
Henry Sanderson, executive editor at battery materials research publisher Benchmark Mineral Intelligence, called the news a “setback for Europe’s ambitions to build a homegrown electric vehicle battery producer to compete with China”.
A few years ago, the European battery ecosystem looked healthy with huge forecasted manufacturing capacity and billions being poured in from investors. However, since then the US has given a huge boost to its domestic battery industry with highly generous tax incentives for clean energy manufacturing, and prices from China have fallen more than anyone had forecasted.
Benchmark estimates that the costs of battery production are 29% higher in Europe than in China.
“‘Go big or go home’ was Northvolt’s initial mantra, which makes sense for the climate transition – yet the cost benefits of scale only come once initial production is mastered,” Anderson added.
Could be a good time to upgrade your EV, "prestige" ones will become less so.
have we reached peak EV penetration?
Mick
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I also have my eyes on a Model Y LR.Awesome news. I love our Model Y LR (should have gone the performance), but my technology challenged wife loves it more.
Looks like i'll be getting a bargain on our second EV.
Or might just buy a Model 3 Performance to really piss off the Elon haters
Not really sorry. But my wife is heading down south on Friday, I will get back to you.I also have my eyes on a Model Y LR.
Do you have any stats on the amount of power used per 100KM's at highway speeds (100 or 110)?
I desperately need range not performance.
Mick
Why Tesla’s Cybertruck won’t be sold in Australia soon despite rolling up at Bunnings
Call it a tease. Tesla is showing off its polarising Cybertruck across Australia, including driving it to a Bunnings store this week where it took up two parking spots.
The vehicle has been in Australia since about April, under dealer registration plates.
It was seen in Sydney around then, Western Australia and more recently at a vintage car event in South Australia. But the exact itinerary for the electric truck – which was developed after Elon Musk’s son Saxon asked “why doesn’t the future look like the future?” – continues to surprise, with Telsa giving little away.
One thing we do know is that it won’t be arriving in any Australian garages soon.
Despite “touring” the Cybertruck across Australia and New Zealand, Tesla has no plans to sell the 5.6 metre-long, 2.4-metre wide vehicle locally. Although Musk says it may be able to certify it in some international markets next year.
Bunnings was able to piggyback off the showcase and light up social media to promote its foray into electric vehicle chargers and accessories.
Musk said costs and regulation were why the Cybertruck, priced from about $US80,000, will be a US-only vehicle for the time being
But cutting production costs on the Cybertruck – which is wrapped in stainless steel, with its body panels, according to Musk, can resist small arms fire (or at least remove driver anxiety over paint chips) – has proven challenging.
Musk said costs and regulation were why the Cybertruck, priced from about $US80,000, will be a US-only vehicle for the time being.
“We did design the car to North American requirements, because if you start going with a superset of all international requirements, it forces a lot of constraints on the Cybertruck that would make the product, frankly, worse,” Musk told investors in June.
“So I think we’ll need to make a special version that is, for example, China-compliant or Europe-compliant.
“But it really doesn’t make sense to add that complexity until we’ve achieved a higher-volume production on the Cybertruck. There’s still a lot of work to do on driving costs down for the Cybertruck. The level of difficulty of going from, say, a prototype…to production…is 100 times harder, and then once you reach production, to improve the price by 20 per cent, like, the cost of goods by 20 per cent, is harder than reaching production in the first place.”
A Tesla Cybertruck parked at Bunnings at Caloundra in Queensland to promote the hardware chain's foray into electric vehicle charges and accessories. Picture: Reddit
Musk described this process in searching for costs a “mega pain”. To be frank, it’s not the funnest job in the world. Like chiselling pennies is not … it’s like washing the dishes, frankly, like wash a lot of dishes here,” he said.
“It’s super fun to make prototypes. That’s really fun and it’s kind of cool to get, it’s pretty cool to get the production going. Then the cost of production is a grind. That is like, you know, it’s hard work.
“You know, there’s some reward to it. Like the sort of a reward to washing the dishes, I guess. You have clean dishes. But that is a tough … so, that’s real hard work.
Despite the challenges, Musk said Tesla might be able to certify it for other markets “sometime next year”.
Bunnings director of merchandise Cam Rist said the Cybertruck was at the hardware chain’s Caloundra store on the Sunshine Coast as part of a Tesla “activation” of a new EV accessory and charging range launch.
Mr Rist said Bunnings was the first major retailer outside of the US/Canada to partner with Tesla on these products, which includes the Tesla Powerwall battery.
“We’re launching a range of electric vehicle chargers and accessories across selected stores to make it easier for our customers to own and maintain EVs,” he said.
“The range, which includes wall-mounted EV charges that can be installed in customers’ homes, is currently being rolled out to 40 pilot stores across Australia in a phased approach.”
“We know the EV market is growing rapidly in Australia and we’re pleased to be making these products more accessible to customers at an affordable price, which have been traditionally hard to find in retail stores.”
Back in the US, a judge has rejected Musk’s multibillion-dollar pay package, upholding an earlier ruling, plunging Tesla’s board into more uncertainty over how to compensate its superstar chief executive for a decade of work.
Delaware judge Kathaleen McCormick rescinded the entire pay package – now worth over $US100bn ($155.62bn) based on Monday’s closing share price – and said Tesla’s board, led by Australian Robyn Denholm – misled investors.
Denholm says the board is considering alternatives but told CNBC “none of them are as good from a shareholder perspective”.
Musk has been hailed as a visionary. He has become an influential figure in Donald Trump’s incoming administration, heading a new Department of Government Efficiency, and plans to save the US federal budget “at least $US2 trillion” as he adopts his ruthless management style on America’s public service.
Can't imagine why anyone in OZ would want a Cybertruck.
But I am sure there is someone out there with sufficient ego and money to prove me wrong.
Mick
So you are comparing it to a car that only drove 3,000km over its life?Interesting comparison:
40y old 205 petrol having done 145000km
Vs tesla 84 kwh battery
In France where co2 per kwh is not too bad due to nuclear
The 205 will have emitted 16 tons C02 on the 40y long lifetime
The Tesla mostly thru the battery building cost, And with the need for 4 to 5 batteries will have produced 85t of co2
Sure sure not same car, etc. But unless yiu fully charge on solar, your EV will most probably produce more co2 than many other cars.
The 205 was consuming 4.8 l per 100km so hybrids would do even better.
EV are not the answer to reducing overall CO2..not that we should care but that is the crusade
https://www.facebook.com/
It will be great when we actually start seeing these cars, rather than just hearing the hype.SAIC, the parent company of MG ,are planning on releasing a new vehicle that has two radical features.
A 10,000 km's range and a solid state battery.
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Mick
It is ,It will be great when we actually start seeing these cars, rather than just hearing the hype.
From the figures of 123.7kWh battery doing 1,000km, that isn't much better energy density than the current Li ion batteries, hopefully they are lighter and smaller packs.
My car has a 64kW battery and 500km is achievable in perfect conditions, so unless the pack size is considerably smaller or lighter, it isn't earth shattering news.
Yes we have been hearing about the solid state batteries for quite some time, it is sounding like SMR's, just around the corner.It is ,
Solid state battery,,
So longevity , no crazy fire risk, no need to to write off the whole car for a small bang in a car park and speed charging
I am not anti EV ( i will buy one at some stage ) , i am not anti TSLA . I just cant be bothered talking to zealots . savvy . Now run along
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