Beleaguered Swedish battery producer Northvolt introduced in the present day that it was submitting for chapter within the U.S., hanging a blow to Europe’s ambitions for homegrown lithium-ion batteries.
The corporate reportedly selected Chapter 11 in an effort to proper its funds.
Northvolt, which had soared for years on the again of robust fundraising and a string of bulletins about new services, has stumbled of late. It laid off 1,600 workers, about 20% of its workforce, in September, and unloaded property in November from its ill-fated buy of Bay Space battery startup Cuberg.
The corporate has raised $14.26 billion, in accordance with PitchBook, together with a $1.2 billion spherical in 2023 to develop operations in North America. However that wasn’t sufficient to maintain the cash-starved operation going. The corporate reportedly was burning by way of $100 million monthly. When BMW pulled out of a $2 billion contract in June after Northvolt didn’t ship on time, chapter grew to become nearly inevitable.
This isn’t the primary time a battery manufacturing startup hit a tough patch — A123 Programs’s failure over a decade in the past stands out as a outstanding instance within the U.S. — and it probably gained’t be the final. Making lithium-ion cells is fiendishly troublesome, requiring deep data of chemistry, manufacturing gear, and high quality enchancment. Even main firms undergo from pricey issues, generally to the tune of $1 billion. Northvolt’s chapter might be extra an indication of poor execution than softer-than-expected demand for EVs.
Is that this the tip for Swedish firm? Not essentially. For one, Volkswagen owns a part of the corporate, and it has positioned an enormous guess on EVs, for which it’ll want thousands and thousands of cells. Plus, Europe, like different superior economies, has been speeding to stake a declare within the battery manufacturing house, and Northvolt appeared like its greatest probability to compete with Asian rivals. It could nonetheless be, maybe with the assistance of a kind of rivals by way of some form of partnership, however first it has to get its home so as.
