EVXL’s Post

🔋 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

Obviously, this was already some big news I wanted to share but didn't want to distract from our COP29 reporting we did over the last week at NovAzure. Hence the posting just now... Northvolt is the last recent story of how the EU has been struggling on getting a key anchor stone onto the map for own battery production. Obviously there is a strong connecting point with the EV OEM storyline across Europe having missed a trick of offering affordable EVs to a very price sensitive market. Without the massive off-take outlooks from BMW (and with VW struggling themselves... wanting to close down plants in Germany) in the EV sector it's no wonder that earmarked key suppliers such as Northvolt feel the hit. Again, this is quite cyclical.... hopefully investors & consumers will go much more "bullish" into the market for 2025. Or is it too late...? Any thoughts?

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 developer and manufacturer #Northvolt has filed for bankruptcy protection in the #UnitedStates, in a move that was followed a day later by the resignation of the company’s founder CEO, former senior #Tesla executive Peter Carlsson. It’s a significant move because Northvolt was one of the brightest hopes for Western electric carmakers that were looking to reduce their reliance on #China battery giants. The company raised more than $10 billion, but was unable to land long term contracts with major car makers or compete with #Chinese competitors. Northvolt makes a range of battery products including #lithium-ion and #sodium-ion cells, electric vehicle (#EV) battery cells, and batteries for standalone storage. Last year it hailed a breakthrough in sodium-ion batteries, which the company said would enable the expansion of cost-efficient and sustainable #energystorage systems around the globe. Its filing for Chapter 11 is designed to facilitate approximately $US145 million in cash collateral and a further $US100 million debtor-in-possession financing, which would be added to a $US100 million promised late last week by #Swedish truck maker #Scania, a shareholder and Northvolt’s biggest customer. Tom Johnstone, the interim chairman of the board, said the company is not giving up on its hopes to play a key role in the transition to electric vehicles. “Despite near-term challenges, this action to strengthen our capital structure will allow us to capture the continued market demand for vehicle electrification,” he said in a statement. “We are likewise pleased by the strong support we have received from our existing lenders and our customers.” Northvolt, with operations in #California, reportedly has only $US30 million in cash, enough only to support operations for around a week. The company also has debts worth $US5.8 billion. Carlsson, who was a former Tesla executive and co-founded Northvolt in 2016, will stay on as a member of the board and senior advisor. “Today marks a significant new phase for Northvolt as well as for me personally,” said Carlsson in a statement. In remarks to reporters, Carlsson described the financing situation “incredibly complicated” and that the company needs to raise around $US1.2 billion to get back on track.

NORTHVOLT CLAIMS BANKRUPTCY - $270 MILLION OF QUEBEC TAXPAYER MONEY MAY BE GONE - Northvolt Says Quebec Battery Plant Will Proceed Despite Bankruptcy Filing in U.S. - Read More: https://hubs.la/Q02Z9Lst0 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. Northvolt #quebec #evs #batteries #canada #cdnpioli #canpoli

„…Northvolt AB filed for bankruptcy protection in the US after failing to secure a lifeline for its battery-cell business in a faltering market for electric vehicles. The Swedish company filed for Chapter 11 in the Southern District of Texas, it said in a statement on Thursday. The legal process provides the company with court protection from creditors, allowing operations to continue as it restructures its balance sheet. Northvolt said its main factory will operate as usual during the reorganization. “The company will continue to make deliveries to customers, while fulfilling obligations to critical vendors and payment of wages to employees,” according to the statement. Through the court process, Northvolt will have access to about $145 million in cash collateral, the company said. One of its customers will also provide $100 million in debtor-in-possession financing. The move caps months of talks with owners, customers and creditors to find a way for Europe’s rare homegrown maker of EV batteries to continue operations. The company slashed jobs and nixed expansion plans in a bid to overcome a cash squeeze that intensified over the autumn, after it lost a key contract and was unable to access $1.5 billion in loan guarantees. In recent weeks, Northvolt was engaged in intense negotiations involving lenders, shareholders and customers over a $300 million rescue proposal meant to tide the company over as it sought longer-term funding. When no deal materialized, the battery maker was left to seek protection from creditors. Northvolt opened its main plant in Skelleftea, near the Arctic Circle, in 2021, but was unable to meet targets for ramping up volumes amid intense competition with established Chinese and South Korean battery-cell manufacturers. In June, shareholder BMW AG canceled a $2 billion battery order over quality issues. As demand slowed in the broader EV market, Northvolt soon launched a review of its sprawling growth plan. It decided to slash 20% of its global work force, replaced the CEO of the flagship plant and bankrupted a unit dedicated to expansion there. Volvo Car AB initiated proceedings last month to take over their joint venture, while Volkswagen AG’s representative to Northvolt’s board stepped down in November. The government of Sweden, meanwhile, repeatedly ruled out taking a stake to save its champion. Chief Executive Officer Peter Carlsson said this month that the company needed more than $900 million to permanently secure its finances, and that the company was looking for partnerships, including in Asia. Northvolt took in some $10 billion in debt and equity financing since its founding, including support from the European Investment Bank, Sweden’s Export Credit Corporation and the Nordic Investment Bank.“

Northvolt’s bankruptcy filing serves as a stark warning for Europe’s EV ambitions and its efforts to reduce reliance on non-European battery suppliers. As Europe’s flagship battery manufacturer, Northvolt’s challenges—stemming from production delays, missed targets, and significant customer losses—highlight systemic barriers to scaling battery production in the region. Recent developments had already signaled trouble. Northvolt failed to meet its 16 GWh production goal for 2025, delayed deliveries that caused a six-month setback for Scania’s battery assembly plant, and lost a €2 billion supply deal with BMW due to production delays. These setbacks underscore critical issues: fierce global competition, slower-than-expected EV adoption, and substantial capital demands. This blow risks increasing Europe’s dependency on Chinese suppliers like CATL and BYD, complicating the transition to a resilient, homegrown supply chain. While the restructuring process offers Northvolt a chance to stabilize, it also underscores the urgent need for Europe to address structural weaknesses in its EV supply chain. Strengthened funding mechanisms, supportive industrial policies, and accelerated market growth will be essential to building a resilient, homegrown battery industry capable of competing on the global stage. The stakes have never been higher. https://lnkd.in/dpZhYRUs #EVSupplyChain #EVBatteries #European_EV_Industry #ElectricVehicles #Northvolt

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

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

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