Mike Isaacs’ Post

The latest buzz about northvolt proves that it doesnt matter who starts first.  It matters who manages to build a sustainable value for the all stakeholders.   $10bn in financing, major Investors from EU and government.  So what really went wrong with the battery makers. Apart from the challenges with production, cancelled orders with majors like BMW. Financial challenges: Northvolt has been burning through $100 million per month. What led the downfall is the commitment of producing more than the fair share of resources.  https://lnkd.in/d74hEerf

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

Do Androids Dream of Electric Sheep? ⚡ Well maybe, but do they dream of Electric Vehicles? Governments fast tracked EV development and as expected there is a lot of overcapacity in the marketplace. Pretty common for a new industry, just not very fun to recalibrate. This leads us to the Northvolt Chapter 11. 🪫 Swedish gigafactory maker Northvolt filed for Chapter 11 bankruptcy in the US on Thursday after months of urgently hunting for a cash lifeline. 🧐 As it looks to restructure, there’s a lot of money on the line: Northvolt has raised $13bn in debt and equity and owes creditors $5.8bn. The company, which was founded in 2016, had struggled to meet production targets, culminating in car maker BMW canceling a billion dollar battery cell order from the company in June.  🏎️ The Northvolt captable Northvolt's 10 largest shareholders, as of its 2023 annual report Investor Amount Volkswagen 21% Goldman Sachs 19.2% Vargas Holdings 7.2% Rocarma Consulting AB 6.7% Arbejdsmarkedets Tillægspension 5.1% Baillie Gifford 4.8% 4 to 1 Investments Kommanditbolag 3.5% AMF Pensionsförsäkring AB 2.8% BMW España Finance S.L. 2.8% Stichting IMAS Foundation 2.4% Entering a new industry early can pose several risks for businesses. Some of the main risks associated with premature entry include; Market Immaturity, Limited Infrastructure, Regulatory Uncertainty, Lack of Consumer Awareness, Technological Challenges, High Operational Costs, Scaling Challenges, Strategic Misalignment, and Financial Risk. Being an early mover can offer competitive advantages. It's crucial to carefully weigh these risks against potential rewards before entering a new and emerging industry. #northvolt #vw #scoutmotors #electrifyamerica #electrifycanada #electricvehicles #management #evnews #tesla #dieselgate

🔋 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

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

Despite US$15 billion in in financing from the likes of Volkswagen, Goldman Sachs, Siemens and JPMorgan, subsidies from Canada and Germany, US$5bn in "green loans" just this year and a US$55bn backlog in orders, in just few months Northvolt has gone from “Europe’s answer to the dominance of Asian groups in the crucial battery technology needed for EVs” to “possibility of bankruptcy protection in the US as one of several options to survive”   EV mania coming back down to earth (and hard)?   𝗡𝗼𝗿𝘁𝗵𝘃𝗼𝗹𝘁’𝘀 𝗳𝘂𝘁𝘂𝗿𝗲 𝗵𝗮𝗻𝗴𝘀 𝗶𝗻 𝗯𝗮𝗹𝗮𝗻𝗰𝗲 𝗮𝘀 𝗯𝗮𝗻𝗸𝗿𝘂𝗽𝘁𝗰𝘆 𝗹𝗼𝗼𝗺𝘀 https://lnkd.in/dJUy3V2r

As Northvolt edges closer to a critical $300 million rescue package, the stakes couldn't be higher for this Swedish battery manufacturer. With fierce competition from established Chinese companies and a slowdown in global battery demand, Northvolt's challenges illuminate the volatile landscape of electric vehicle supply chains. Key players like Volkswagen and Goldman Sachs are rallying support to stabilize production, but the path ahead is rocky. The recent job cuts and halted expansions signal deeper operational struggles that could undermine its ambitious plans. This situation serves as a wake-up call for the industry—survival hinges not only on securing funding but on navigating fierce competition, maintaining quality, and adapting swiftly to market demands. Will Northvolt rise to the challenge, or will it become a cautionary tale in the battery sector? Time will tell. What are your thoughts on the future of battery manufacturing in the face of such challenges?

In the world of EV batteries, Northvolt AB was seen as Europe’s shining hope—a company poised to lead the charge toward sustainable, localized lithium-ion battery manufacturing. Founded in 2015, Northvolt’s vision aligned perfectly with Europe's ambitions of reducing dependency on Asian manufacturers and driving the green energy transition.   Yet, despite massive investments (~$15 billion), significant partnerships, and the production milestone at its Skellefteå gigafactory, Northvolt has recently filed for Chapter 11 bankruptcy protection in the U.S. What went wrong?   1. Operational Complexities: Scaling production proved harder than anticipated, with delays in equipment from Asian suppliers and inefficiencies in ramping up manufacturing.   2. Financial Pressures: Despite a strong funding pipeline, losses of $1.2 billion in 2023 highlighted financial mismanagement and over-ambitious expansion plans. 3. Market Realities: The global battery market is fiercely competitive, dominated by established Asian players. Coupled with slower-than-expected EV demand growth, Northvolt struggled to carve out a sustainable market share.   🔍 Lessons from Northvolt’s Chapter 11 Filing: Filing for bankruptcy does not mean the end; it is a chance to restructure, recalibrate, and return stronger. With $245 million in additional funding secured during the restructuring process, Northvolt is taking critical steps to stabilize operations and fulfill customer commitments. But it serves as a wake-up call for startups and established players alike on the complexities of scaling in a competitive, fast-evolving industry.   What This Means for the Industry: Northvolt’s story underscores several crucial realities:   The importance of agile, well-planned operational strategies.   The need for robust supply chain management in this highly specialized sector.   The challenges of balancing innovation with scalability, especially in a capital-intensive industry like batteries.   I see this as a pivotal moment for the industry. It’s a reminder that while ambition is essential, the execution and adaptability to market realities are equally crucial. We at Evalueserve have been helping clients navigate similar challenges—whether it’s understanding evolving business models, optimizing supply chains, or exploring innovative solutions for the future.   #northvolt #batteryindustry #sustainability https://lnkd.in/gdVRSQSy

In my years working across various industries like Energy, manufacturing, and supply chains, one truth has always stood out: no amount of innovation or funding can replace the fundamental principles of commerce. The recent news about Swedish EV manufacturer - NORTHVOLT - filing for Chapter 11 bankruptcy is a sobering example. Despite billions in venture funding and government support, they struggled to match the scale and supply chain efficiency of global giants like CATL. Having been part of major capital projects in energy industry where scaling manufacturing operations and optimizing supply chains were central to success, I can tell you firsthand: size matters, and so do the economics behind it. Building factories in high-cost regions without controlling intermediate materials or leveraging economies of scale was always going to be an uphill battle. This isn’t just about Northvolt or Europe’s electrification ambitions—it’s a lesson for anyone in the manufacturing space. Right sourcing, mastering supply chains, and manufacturing at scale aren’t optional; they’re the foundation. As the industry evolves, companies that prioritize these basics will thrive. For me, this news reinforces an old lesson: vision and ambition are important, but understanding and respecting the rules of the game is what ensures long-term success. Let’s hope the industry takes note. You thoughts ?? https://lnkd.in/gWgYgZSH