Patrick Vlaeminck’s Post

A sad day for all those who believed in #Northvolt and its promise of the world's cleanest, #madeinEurope #batteries. The Northvolt story shows ultimately business success depends on ... well .. corporate strategy. Northvolt made mistakes. The same is true for automakers that are currently struggling. But this is about much more than one company's failure. The fundamental question is whether Europe really wants #strategicautonomy in batteries and is willing to pay the price for that. We have super low battery #tariffs, no other meaningful entry restrictions, a weak subsidy regime, and Chinese companies producing at scale and costs that elude Europe based companies. Honestly, why would anyone put their savings in EU (based) battery makers today? I would not. The reality is strategic autonomy will require a US style approach. So IRA + tariffs + local content. And it will be expensive for the state and for consumers. But it's defensible. The longer the EU fails to respond the clearer it becomes it is de facto giving up on strategic autonomy in battery supply chains. This too is defensible - it is a copy paste of the EU's solar strategy - but can we please stop pretending?

"With Europe’s battery boom turning to bust, more pain may be in the offing (...) There will not be big enough demand to meet supply and Northvolt may very well be the first casualty of the market correction currently underway, (...) At stake is Europe’s effort to build a critical industry in a global marketplace dominated by Chinese rivals such as CATL and BYD that are selling batteries and EVs at unbeatable prices” #automotiveindustry https://lnkd.in/eRnAb6DE

Batteries for electric vehicles have been deemed key to the EU’s green transition plans. Now, one of Europe’s most promising bets at securing “home-made” battery production could be lost, as Swedish battery giant Northvolt has plunged into crisis. Their big promises of manufacturing unprecedented volumes of EV batteries to major European carmakers – moves which have enabled Northvolt to raise more capital than any other privately owned European start-up – have tripped the company up, as they have failed to both produce and deliver on time. Just in June, BMW pulled out of their two billion dollar deal with the start-up. Now, the company is caught in a turmoil of job cuts, a total freeze on all employee spending and a partial shutdown of production at Northvolt Ett, Europe’s biggest EV battery factory. The Swedish government, who ruled out a state-sponsored rescue earlier this week, argues that the responsibility lies entirely with Northvolt. However, this verdict could change, as Northvolt is receiving strong assistance from other countries. The German government has announced taking an active role in discussions aimed at solving Northvolt’s problems, having already given the company one billion euros in state aid to finance an EV battery factory in the German town of Heide. A commentary by Felicia Larsson. Read here: https://buff.ly/4ea2Xb0

$10 billion dollar loss on Electric car battery maker, Northvolt. BMW recently pulled out of a £1.7bn contract. (Well because it was a stupid Green agenda idea to begin with.) (#ClimateCult kills more jobs.) Northvolt had been building one of Europe’s biggest battery plants, close to the Arctic circle, which would have produced home-grown cells for the continent’s carmakers. Its operating losses more than tripled to £800m last year, the business said on Tuesday. BMW recently pulled out of a £1.7bn contract citing significant delays and quality issues, opting instead for Asian supplier Samsung SDI. Northvolt and BMW said the companies had “jointly decided to focus Northvolt’s activities on the ambition of developing the next generation of battery cells”. https://lnkd.in/g2zTSbVe

https://lnkd.in/gPaKF9ik This is a high-profile bankruptcy – the most well-funded battery startup in Europe. It burned through $5.8B of debt. The lesson here is not the oversupply of #batteries or the drop in demand for #EVs. Those are external events and not controllable by the entity. The lesson is execution and unfettered expansion. Those are internal decisions. Northvolt tried to vertically integrate battery production – cathode material, cell production, battery module and pack assembly and battery recycling. Geographically, it expanded all over the place – Poland, Canada, Sweden and Germany. Doing one of the unit operations well (low cost and high quality) is tough. Doing them all is climbing Mount Everest without an oxygen mask. The tried and true still applies – staying focused and doing one thing well.

Batteries not included and neither is a long runway. Europe's battery unicorn Northvolt is heading towards its last recharge and filing for bankruptcy. The company has raised nearly $15 billion, including a $1.2 billion round in 2023 to expand operations in North America. But, with $5.8 billion in debt and $30 million left in the bank, Northvolt's ambitions to build home-grown lithium batteries for Europe are faltering. The battery business isn't for slow chargers. A burn rate of $100 million a month along with a failed deal with BMW polluted Northvolt's viability. Lithium-ion cells aren't exactly something you can whip up in your garage. They're actually very difficult to build and manufacture. The other issue to consider is the decline in EV sales, but demand for batteries remains high so Northvolt's issues may have more to do with execution than EV adoption. One positive charge for Northvolt is Volkswagen who owns part of the company. While the automaker is facing its own challenges, it's still committed to EVs, while will need millions of cells. The other bigger issue is the increasing advance of EVs and batteries from Asia, most notably China, which are cheaper than that in Europe and the U.S. For Europe. Despite its bankruptcy, Northvolt may be that country's best hope on the competitive landscape https://lnkd.in/gPSMi8nN #northvolt #lithium #batteries #electricvehicles #europe #automotiveindustry

Northvolt’s struggle to deliver batteries as promised, with the resulting scale-back of its plans, highlights the difficulty of fostering a strategic industry in defiance of prevalent market dynamics. The core logic of the huge bet on Northvolt seemed, to me, to be that protectionism would shelter and allow it a safe place in which to incubate. Unfortunately, Northvolt could not be sheltered from the unforgiving pace at with the batteries industry l moves globally. Their delay in deliveries to BMW, which caused the cancellation of a multi-billion dollar contract, showcases this - by the time the batteries would have eventually been delivered, they would have been obsolete. Unfortunately, things do move faster in China than in Sweden. Nevertheless, Northvolt’s unfolding failure is sad. Plans are now reduced to something much less ambitious, with heavy reliance on Asian suppliers - chiefly, perhaps, Chinese ones - all but ensured. Investments into the burgeoning Swedish eco-system of suppliers to the batteries industry, too, is bound to be impacted - companies that were scaling up to participate in Northvolt’s supply chain must, obviously, be re-thinking their engagements. https://lnkd.in/drVvuWXh

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.

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

The European battery industry faces a significant crisis as local projects falter, exemplified by Northvolt AB’s Chapter 11 bankruptcy filing in 2024. Delays or cancellations have affected 12 of 16 planned battery factories, while Asian manufacturers such as Contemporary Amperex Technology Co., Limited and Samsung SDI advance steadily, further solidifying their lead in a sector critical for Europe’s green economy ambitions.  The bankruptcy of Northvolt, once seen as Europe’s leading EV battery hope with $55 billion in orders, underscores the region’s struggle to scale production efficiently and compete with China’s established players. Northvolt’s failure to control costs and meet quality standards prompted BMW to cancel a €2 billion order. Other European projects, including those by Britishvolt and the Stellantis-Mercedes-Benz AG ACC - Automotive Cells Company venture, have scaled back operations or collapsed, leaving €36 billion worth of investments in jeopardy.  Asian companies dominate with advanced technologies, competitive pricing, and robust supply chains. CATL, for instance, employs 21,000 R&D engineers and has operational sites in Hungary and Germany. This imbalance has made European automakers reliant on Asian partners for battery cells.  Europe’s slow transition to battery technology has created vulnerabilities. Chinese and South Korean manufacturers benefit from decades of expertise, high-yield production, and government-backed expansion. BYD, which began producing EVs in 2008, now surpasses Volkswagen Group as China’s top-selling car brand and is aggressively expanding into Europe. In contrast, European automakers’ prolonged focus on traditional combustion engines delayed the development of a competitive EV ecosystem.  This dependency extends geopolitical risks. Without domestic manufacturing, Europe could face supply chain disruptions or political leverage from Asian nations. The situation parallels Europe’s reliance on foreign oil and gas, raising alarms about energy independence.  Some initiatives show promise. Stellantis-Mercedes’ ACC factory in Douvrin, France, became operational in 2023 and aims to expand its workforce. Similarly, Verkor, backed by Renault Group, plans to begin battery production in Dunkirk by 2025. These efforts, however, are insufficient to offset broader industry setbacks.  The EU must balance long-term green ambitions with immediate economic realities. Sluggish EV sales have led automakers to scale back electrification plans and lobby for delaying the 2035 ban on combustion-engine cars. If the region fails to accelerate investments and reduce dependence on Asian suppliers, it risks relegating its auto industry to a subordinate position globally.  https://lnkd.in/eM87_8h5 #automotiveindustry #electricvehicles #china #europe #USA Tesla BYD MG Motor Europe