With a $300 million bailout in its sights, Northvolt AB appears to have dodged a major threat to its existence. Yet longer term prospects for the debt-laden battery maker remain fraught.
Charles Daly, Rafaela Lindeberg, and Niclas Rolander --
“While this is a significant amount of funding, Northvolt will need to spend it wisely and rebuild the confidence of customers such as BMW who cancelled a $2 billion deal in June,” said Andy Leach, an associate at BloombergNEF. For all its challenges, the Swedish company remains “at least two years ahead of other European battery ventures,” Swedish financier Harald Mix, who founded the battery maker, wrote in a newspaper op-ed this week.
“The goalposts have moved for Northvolt since they first started this project,” he said by phone. “The Chinese companies have pushed the boundaries on battery costs and production scale, making it difficult for the Swedish company to compete.” In recent weeks, Northvolt has begun the heavy lifting that will be required to pull it out of its mess. The company replaced the boss of its main plant near the Arctic Circle and shelved an expansion there, putting the unit overseeing the project into bankruptcy. It also said it will lay off 20% of its staff, affecting 1,600 in Sweden.
Volkswagen has said it will help Northvolt scale up battery-cell production but provided little detail. Scania, which relies on Northvolt cells, could provide financial aid, people familiar with the matter have said.
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