Bjorn Odenbro • 欧睿龙’s Post

Northvolt’s shock decision this week to shrink its operations and cut jobs has sparked fears that Europe's best shot at a home-grown electric vehicle battery champion may stall, sector experts and people familiar with the situation told Reuters. Struggling with order delays and the loss of a $2 billion BMW Group contract in June, CEO and ex-Tesla executive Peter Carlsson said on Monday the company he co-founded in 2016 would stop producing cathode active material (CAM) - a crucial battery component - scrap plans for a Swedish facility and seek investors for a plant in Poland. The Swedish company said it will focus on its core business of making battery cells, the units that store chemical energy. The decision effectively means Northvolt, Europe's most developed battery player, has stepped back from its original mission to be an all-in-one shop offering everything from material production and battery making to end-of-life recycling. Coming just as former European Central Bank head Mario Draghi warned of green tech competition from China in a long awaited report, the announcement raises questions about Northvolt's ability to be a major force in Europe's electric mobility push. "Northvolt was the doyen of European battery industry and if they can't produce (batteries), it really shows that, industrially, Europe is going to be incredibly dependent on Asia going forward," said Andy Leyland, co-founder of supply chain specialist SC Insights. Benchmark Mineral Intelligence analyst Evan Hartley said the scrapping of cathode active material production will put Europe "at a further disadvantage when it comes to local production". Northvolt has had problems in manufacturing high-quality batteries in high volumes to meet its ambitious targets while fighting Chinese rivals such as CATL (300750.SZ), opens new tab and BYD (002594.SZ), opens new tab, analysts told Reuters. Northvolt's sprawling business has been a complicating factor, they added. In its strategic review, the company did not address the issue of delays but said it would focus on being a battery cells leader. Northvolt will now need to buy its cathode active materials from Chinese or South Korean suppliers, said a person familiar with the matter.

Reset? Temporary Retraction? Or a Warning Shot Across the EU’s Competitive Bow? What’s going on at Northvolt—are they just catching their breath, or is this more of a strategic retreat? Their recent pullback and layoffs might look like a mere reset on the surface, but could it be a sign of something deeper? Is it a tactical move, a sign of market recalibration, or a glaring red flag pointing to Europe's challenges in staying competitive in the global battery arms race? The bigger question: Is Northvolt's move a temporary retraction or a reflection of broader issues within the EU’s industrial strategy? Are they simply trimming the fat, or does this signal a more systemic issue with the EU’s ability to keep pace with global giants in the race for clean energy dominance? If the answer is the latter, perhaps it’s time for Europe to ask itself some tough questions: Is it ready to play in the big leagues, or are these growing pains indicative of a much larger existential crisis about its competitive future?

Amidst significant industry shakeups, Northvolt—once a stellar battery unicorn with grand ambitions for revolutionizing Europe’s lithium-ion battery production—faces a critical juncture. Filing for Chapter 11 bankruptcy in the U.S., Northvolt’s financial struggles paint a vivid picture of the intense pressures within the battery manufacturing industry. Co-founder and CEO, Peter Carlsson, has chosen to step down, leaving room for a new leadership phase focused on overcoming these challenges. Despite formidable hurdles, including the loss of a significant $2 billion BMW contract, there remains a flicker of hope for the Swedish company. Volkswagen's vested interest in Northvolt signifies a potential lifeline, suggesting the possibility of future collaborations to sustain Europe's role in the competitive battery market. As the energy sector looks ahead, Northvolt’s path forward will be a case study in resilience and strategic pivoting. The collapse underscores the complex nature of battery production—a domain marked by excruciating demands for production precision and significant financial investment. Time will tell if this is merely a chapter in Northvolt’s storied rise, or the beginning of a reinvention that could redefine the landscape of energy solutions in Europe and beyond.

2024 has not been kind to #Northvolt, the #Swedish battery-maker co-founded by Peter Carlsson, who previously worked on battery technology at #Tesla. The problems have led #BMW to rethink its $2 billion order for Northvolt batteries after the company was unable to meet its production targets. A few weeks ago, Northvolt announced the initial steps that are part of a strategic review. These measures reflect a challenging #macroeconomic environment and a subsequent reassessment of Northvolt’s near-term priorities, leading to a rescope of operations and appropriate resizing of our workforce, the announcement said. The objective of the strategic review is to focus resources on becoming a leader in sustainable large-scale cell manufacturing. That will involve ramping up the first phase of the Northvolt Ett #gigafactory in #Sweden, while continuing to leverage the company’s R&D facility, Northvolt Labs, in Västerås, Sweden. That is considered a key requirement for Northvolt to maintain its position as a leading cell manufacturer in the Western world. Peter Carlsson said, “With the strategic review now underway, we are having to take some tough actions for the purpose of securing the foundations of Northvolt’s operations to improve our financial stability and strengthen our operational performance. While conditions at this time are challenging, there remains no question that the global transition towards electrification — and the long-term outlook for cell manufacturers, including Northvolt — is strong.” Tom Johnstone, head of the Northvolt Board of Directors, commented: “Our success is in part dependent on the overall market ramp-up of electric vehicles and support from stakeholders around us. Equally, we must build on lessons learnt through our journey to date.” Now that review process is complete and the company has announced its plan for moving forward. It is harsh news for many employees. It includes a revised scope of operations in Sweden to ensure that resources are focused on accelerating production in large-scale cell manufacturing at Northvolt Ett. These measures are expected to result in the redundancy of approximately 1,600 Northvolt employees, split across #Skellefteå (1,000 positions), #Västerås (400 positions), and #Stockholm (200 positions). All redundancies are subject to ongoing union negotiations. Redundancy is how companies say “You’re fired!” but in a less mean way. In adjusting its near-term ambitions and focusing on the ramp-up of the first 16 GWh phase of Northvolt Ett, Northvolt is positioning itself to prioritise commitments to its current automotive customers. This priority is further being supported by a recently introduced acceleration program geared to further increase levels of production. The program is already demonstrating results and contributed to Northvolt Ett cell production increasing three-fold since the beginning of this year.

Reutersilta laaja artikkeli Northvoltin tilanteesta: "Northvolt's shock decision this week to shrink its operations and cut jobs has sparked fears that Europe's best shot at a home-grown electric vehicle battery champion may stall, sector experts and people familiar with the situation told Reuters. Struggling with order delays and the loss of a $2 billion BMW contract in June, CEO and ex-Tesla executive Peter Carlsson said on Monday the company he co-founded in 2016 would stop producing cathode active material (CAM) - a crucial battery component - scrap plans for a Swedish facility and seek investors for a plant in Poland. The Swedish company said it will focus on its core business of making battery cells, the units that store chemical energy. The decision effectively means Northvolt, Europe's most developed battery player, has stepped back from its original mission to be an all-in-one shop offering everything from material production and battery making to end-of-life recycling. ...Despite its struggles, Northvolt is still far ahead of such rivals as Norway's Morrow and Freyr, and Stellantis and Mercedes' joint venture Automotive Cells Company (ACC)." #akkuteollisuus #northvolt https://lnkd.in/d_haUvWh

Northvolt's struggles reflect broader challenges that Europe's nascent electric vehicle and battery industry faces. But despite massive capital investments-in Northvolt's case, $15 billion to date-the company is finding it difficult to remain competitive in a market dominated by an aggressive Asian, mainly Chinese manufacturing push. Operational setbacks, financial losses, and delays in planned joint ventures suggest that the capacity of the European market to support such ambitious green technology projects may have been overestimated. Only adding to Northvolt's woes is the fact that demand for battery-powered vehicles has cooled off in Europe, posting a nominal 1.3% growth in the first half of 2024 from a growth of 14.6% last year. This has been due to strong competition from China, where production costs are low in comparison and technological development is quite rapid. It has forced European giants such as Volkswagen and Volvo to seriously reconsider their strategies; with some even dropping their all-electric vehicle sales targets, such as Volvo for 2030. A string of accidents, such as the death of three workers shortly after their shifts, calls into question Northvolt's operational management and workplace safety. Besides this estimate, it predicted a loss of $1.2 billion for the year 2023-nearly a fourfold increase on the $285 million loss reported the previous year. Delays in joint-venture factories currently under construction in Sweden, Germany, and Canada further underpin the challenges this company faces. The situation of Northvolt, thus, is one real test of how deep the challenges are for building a competitive and sustainable green technology industry in Europe. From being hailed earlier as a beacon of hope and potential competitor to China's dominance in the EV battery market, Northvolt has gone on to being questioned on grounds of scaling up operations, keeping finances in order, and competing in a world where cost and efficiency would be tantamount to everything else. The crystal clear lesson that emerges for Europe is that ambition alone will not be enough; strategic execution, competitive pricing, and operational excellence are needed to remain competitive in fast-changing green technologies. #Northvolt #EV

Northvolt to focus on ramping up the first 16 GWh production capacity at Northvolt Ett, cuts nearly 1,600 jobs #EV #electricvehicles #electricmobility #zeroemissions #climateaction #investinourplanet #sustainability #greenmobility #cleanmobility #futuremobility #sustainable #electric #battery #sweden #northvolt https://lnkd.in/dDm_5gEn

Northvolt AB is closing in on a $300 million rescue package that includes debt and equity, according to people familiar with the matter, buying time for the cash-strapped Swedish battery maker to stabilize production and line up longer-term financing. A combination of shareholders, lenders and customers are participating in the bridge funding, and the instruments vary among these groups, the people said, asking not to be named commenting on private negotiations. Discussions are in the final stages, though there remains some risk they can still fall apart, they said.  The stopgap funding would buy time for the electric-vehicle supplier to secure more-permanent funding that would put it on a path toward self-sustainability. The company has sealed tens of billions of dollars in battery orders but has struggled to deliver finished products at acceptable quality and rates.      Blog – EV pivoting of Honda - https://lnkd.in/gqM8gb73 Northvolt #EV #Lithium LG Electronics Arcadium Lithium Lithium Americas Corp.

Ouch!🪫 In Northvolt’s own words… ‘As part of our strategic review, the Northvolt Board has agreed to the following actions: In Skellefteå, Sweden, Northvolt intends to place operations at Northvolt Ett Upstream 1 cathode active material production facility into care and maintenance until further notice. This is motivated by a necessity to streamline operating costs, as well as optimize the sequencing of Northvolt Ett’s ramp-up. In Borlänge, Sweden, the Northvolt Fem program on the Kvarnsveden site will be terminated. The site was acquired by Northvolt in 2022 and was envisioned as a new facility for cathode active material production. Northvolt has concluded an agreement for the sale of the site. In Gdańsk, Poland, Northvolt aims to assure the successful future of Northvolt Systems, including Northvolt Dwa, Europe’s largest battery systems production facility. To enable this, Northvolt will enter into discussions with potential future partners and investors that can capitalize the production of battery systems and packs. In California, United States, Northvolt has already communicated its intention to integrate its subsidiary Cuberg and lithium metal technology into Northvolt Labs, Sweden’ Lessons will be learned?…and what might those be perhaps? The dominance of the Asian🔋players continues unabated, so how, when, and where does 🇺🇸 & 🇪🇺 reconcile this reality? #gigafactory #renewables #electricvehicles #geopolitics https://lnkd.in/ev7xiXVR

The problems facing the Swedish EV battery manufacturer Northvolt (along with other European battery manufacturers), (please see the Swedish business newspaper Dagen Industri today Sept 23, 2024) I foresaw and wrote about here on LinkedIn already when Northvolt published its plans to start its factory. A greenfield investment in Sweden, competing with already established car manufacturers and Chinese battery producers, could in my eyes not have a good future. One does not need to have in-depth knowledge into the sector to realize that! For Northvolt 2023 saw revenues of MUSD 126 and a loss of staggering MUSD 1,033 before tax, I have not been able to obtain interim figures for 2024 as the company is not public. Alone the initial investment and the production costs in Sweden (compared to Asia) spoke against it. Further, neither the Swedish nor other European governments seemed to intend to give the necessary financial incentives to buy the significantly more expensive EVs, compared to the traditional combustion powered ones. I am sure my old friend and classmate from the university, Peter Carlsson, had good intentions but was probably blinded by the EV hype at the time and inspired by his job at Tesla/Elon Musk. I offered him to support the start-up venture with my risk management knowledge but the answer was "we do not need a risk manager now....". Well I think risk management is heavily underrated - still 2024 - at least outside the financial sector and it would most likely have been also there if it were not for the laws and regulations, most of which came as result of the financial crisis 2008. https://lnkd.in/dWN57ke3 https://lnkd.in/dghBG72v