Christopher Gruen (Grün)’s Post

Northvolt, the Swedish EV battery manufacturer, recently filed for Chapter 11 bankruptcy in the U.S., citing over-expansion and fierce competition from Chinese battery makers. Despite raising over $13.8 billion in equity and public funding since its founding in 2016, the company was burdened with $5.8 billion in debt and only $30 million in cash at the time of filing. Key setbacks included the loss of a $2.1 billion contract with BMW and slower-than-expected demand for electric vehicles in Europe. Northvolt hopes to restructure and secure additional funding by early 2025 to continue operations. The bankruptcy has significant implications for Europe's ambitions to reduce dependency on Chinese battery manufacturers, who dominate 85% of global production. European governments are now emphasizing strategic initiatives to boost local production and diversify raw material sources. Volkswagen, a major investor in Northvolt, has already written down much of its stake, further complicating the outlook for European EV manufacturing. https://lnkd.in/d6DUz3uv

🔋 Swedish battery giant Northvolt files for bankruptcy 🌍 Swedish battery maker Northvolt filed for Chapter 11 bankruptcy protection in the U.S., delivering a major blow to Europe’s electrification ambitions. Once one of Europe’s most valuable privately held tech firms, the company said Thursday that the voluntary move will allow it to restructure its debt, scale back its business and secure a sustainable foundation for its continued operation. A partner of major European automakers, Northvolt produces lithium-ion batteries for the electric vehicle industry, which has recently been rocked by intensifying competition from the likes of China. The Stockholm-based business has long been regarded as Europe’s best hope of building a homegrown EV battery champion. More recently, however, the company has been struggling to stay afloat while navigating a major cost-cutting drive. ✍ Here's the full story: https://lnkd.in/e3-9HwET #EVs #autos #electrification

European EV Battery Champion Northvolt Files for Bankruptcy Amid Cash Crisis Swedish EV battery manufacturer Northvolt has filed for Chapter 11 bankruptcy protection in the US, with only enough cash to keep operations running for about a week, according to Reuters. Financial Struggles Hit Hard The company, which produces battery cells for electric vehicles, is facing a severe liquidity crisis with just $30 million in cash against $5.8 billion in debt. They’ve secured $100 million in new financing to support the bankruptcy process, with Swedish truck maker Scania offering an additional $100 million loan specifically for their Skellefteå manufacturing facility. Impact on European EV Industry This development is a significant setback […] by Haye Kesteloo #ev #BYD #China #Europe #Make #SEC #Tesla

Northvolt AB has filed for bankruptcy protection in the United States, but said the move will not jeopardize the manufacturer’s planned electric vehicle battery plant in Quebec — though hundreds of millions of taxpayer dollars invested in the parent company could be lost. Amid a sputtering global market for EVs, the Sweden-based outfit and several subsidiaries filed for a court-supervised reorganization of its debt and assets under Chapter 11 of the U.S. bankruptcy code. However, Northvolt said its Canadian subsidiary is financed separately and “will continue to operate as usual outside of the Chapter 11 process.” The Northvolt plant, dubbed Northvolt Six and slated for construction about 25 kilometres east of Montreal, amounts to a $7-billion undertaking that aims to churn out battery cells and cathode active material for electric vehicles. #Quebec #NorthVolt #project #will #continue #despite #UnitedStates #operations #filing #for #chapter11

Narratives crush rising tides. Stick to facts, you’ll do better. “Despite raising $13.8 billion in funding, the company generated only $128 million in revenue in 2023” “Reasons For Failure: Weak Market Demand: Despite the global EV push, demand for electric vehicles in Europe has softened, leaving automakers with excess inventory and scaled-back ambitions. Some automakers, delayed or downsized electrification projects, directly impacting Northvolt’s revenue pipeline. Operational Challenges: Scaling production is notoriously difficult, particularly in an industry as capital-intensive as battery manufacturing. Northvolt struggled to meet delivery timelines, losing a $2B contract with BMW in June after delays earlier in the year. Leadership Missteps: Northvolt tried to scale too quickly, taking on ambitious projects (like their green gigafactory) without ensuring its core operations were running smoothly. Former CEO Peter Carlsson admitted, “I should have probably pulled the brake earlier on some of the expansion paths in order to make sure that the core engine was moving according to plan.”. Financial Mismanagement: Northvolt's financial health deteriorated sharply, with net losses escalating from $285 million in 2022 to approximately $1.2 billion in 2023. #getoutside

Northvolt’s bankruptcy signals a wake-up call for Europe’s battery ambitions. Despite substantial funding and bold expansion plans, Northvolt has filed for bankruptcy protection. This isn’t just a company in crisis—it’s a symptom of broader challenges in Europe’s efforts to establish a competitive battery manufacturing sector. Here are 4 key lessons from Northvolt’s story: 1️⃣ Market Volatility: A slowdown in electric vehicle (#EV) demand, driven by inflation and wavering consumer confidence, created turbulence for Northvolt. Reduced EV sales, especially in major markets like Germany, disrupted its growth model. 2️⃣ Competitive Pricing: Cheaper EVs from China, built with cost-efficient Chinese batteries, intensified the pressure. Competing on price and scale has become an uphill battle for European firms. 3️⃣ Operational Gaps: Mismanagement and operational setbacks played a significant role. Dr. Andy Palmer CMG, FREng, former Aston Martin chief executive, puts it bluntly: “The biggest issue is that batteries are not easy to make, and Northvolt haven’t satisfied the supply demands of their customers – that is a management issue.” 4️⃣ Inconsistent Support: Even with significant funding, inconsistent government and corporate investments compounded its struggles, especially as it scaled back its expansion plans. James Frith, Europe head at investment firm Volta Energy Technologies, notes: “Europe needs to rethink how it supports a nascent sector before China eats up the entire value chain.” 🛑 The implications? If Northvolt cannot be revived, Europe risks ceding what little progress it has made against China in developing its own battery supply chain. Simon Moores, CEO of Benchmark Mineral Intelligence, warns: “The pendulum of industrial battery power has just swung east towards China.” While EV demand may have stalled temporarily, the mandates to sell more green cars mean demand for batteries will grow. If Europe’s batteries are not made locally, the bloc will be dangerously exposed to Chinese dominance. 💡 What’s next for Europe? • Double down on local innovation. • Strengthen investment strategies for high-growth industries. • Cultivate in-house expertise to reduce reliance on foreign tech. Northvolt’s restructuring journey will be pivotal in shaping the future of Europe’s battery sector—and its ability to compete globally. 🌍 What do you think Europe should do to r eclaim its position in the green energy race? P.S. If this post resonated, let’s discuss below or feel free to share it with your network. #Batteries #EVs #GigaFactories #ElectricVehicles

Northvolt AB CEO Peter Carlsson is stepping down as the Swedish battery maker embarks on a restructuring under bankruptcy court protection. Carlsson, a co-founder of Northvolt, has led the electric vehicle supplier since its inception in 2016. He raised billions of dollars in debt and equity with a promise to be a pioneer in European battery production. The plan unraveled after a string of operational setbacks hobbled its finances. On Nov. 21, the company filed for Chapter 11 bankruptcy protection in the U.S. after a desperate bid to secure rescue funding fell short, leaving the struggling battery maker with just one week’s cash in its accounts.   https://lnkd.in/g2sz4Nmz https://lnkd.in/gqFsz52s The Swedish company, whose motto is "make oil history", has received more than $10 billion in equity, debt and public financing since its 2016 start-up. Volkswagen and Goldman Sachs each own about one fifth of its shares. In recent months, it has shrunk business and cut jobs in a bid to shore up its finances. But it has struggled to produce sufficient volumes of high-quality batteries, and lost a 2 billion euro ($2.1 billion) contract from BMW in June. But growth in EV demand is moving at a slower pace than many in the industry projected, and China has taken a huge lead in powering EVs, controlling 85% of global battery cell production, International Energy Agency data shows. Northvolt Volkswagen Volkswagen Group Goldman Sachs     Global EV Sales – October 2024 - https://lnkd.in/gNiyyAz3

𝗡𝗼𝗿𝘁𝗵𝘃𝗼𝗹𝘁 𝗳𝗶𝗹𝗲𝘀 𝗳𝗼𝗿 𝗯𝗮𝗻𝗸𝗿𝘂𝗽𝘁𝗰𝘆 𝗶𝗻 𝗺𝗮𝗷𝗼𝗿 𝗯𝗹𝗼𝘄 𝘁𝗼 𝗘𝘂𝗿𝗼𝗽𝗲𝗮𝗻 𝗘𝗩 𝘀𝗲𝗰𝘁𝗼𝗿 This is a massive blow to Europe's EV manufacturing goals, as Northvolt was viewed as the best homegrown chance for reducing reliance on China. #EV #NetZero #EU #GreenDeal #Agenda2030 #Economy #Crisis #Unemployment #Northvolt #Europe #Industry #EVs #Sweden https://lnkd.in/eguUccU3

Things are accelerating for Northvolt as the company filed for chapter 11 bankruptcy in Texas. Although it gives the company a 55% chance of a positive exit, only 10 to 15% companies exiting chapter 11 turn into effective businesses. For Europe, there is much more at stake here than the survival of a company. Europe doesn't have the luxury of letting down one of its main EV battery makers. #europeanparlement #iea #energytransition https://lnkd.in/g3WEbWqc

In the face of such competitive pressures, Europe is also entering a delicate moment in the green energy sector