Northvolt finds itself deeper in uncertainty, but some clarity has emerged. On October 8th, Northvolt announced that its subsidiary, Ett Expansion AB, filed for bankruptcy with the Stockholm District Court. This follows the suspension of the Northvolt Ett expansion project. Ett Expansion AB, which had no direct employees, was responsible for the project’s construction. Despite this, Northvolt emphasized that the bankruptcy has no legal bearing on other entities within the group, and it continues dialogue with stakeholders. However, Northvolt has been grappling with a major financial crisis.
Funding has nearly dried up for the company. On October 3rd, BMW ruled out participating in Northvolt’s next round of financing and previously canceled a €2 billion battery order in June. BMW’s actions may echo broader investor sentiment, as Volkswagen, another key customer and investor, also skipped recent rounds of financing. Additionally, the Swedish government has made it clear that it will not financially bail out Northvolt.
With no major customers or significant financial backers, Northvolt, which reportedly loses between $200 million to $300 million monthly and recorded a $1.167 billion loss in 2023, could be heading towards bankruptcy itself. Volkswagen has reportedly assembled an internal task force to evaluate the functionality of Northvolt’s batteries and assess the need for restructuring. Despite these financial woes, Northvolt claims to have made “significant progress” in securing funds and states that Goldman Sachs and BlackRock are helping the company raise more capital.
Northvolt’s struggles also extend internally. The company has repeatedly delayed deliveries and faced quality issues, leading to the cancellation of BMW’s significant battery order. Since July, Northvolt has implemented various self-preservation measures, such as delaying construction, downsizing production, and reducing its workforce, but these efforts have seen limited success.
Adding to the pressure, Northvolt recently paused expansion of its sole operating plant, Northvolt Ett, to focus solely on increasing its initial 16GWh capacity. However, the company responsible for this work, Ett Expansion AB, has now filed for bankruptcy.
In summary, Northvolt is facing severe financial and operational challenges, with its key customers and stakeholders losing confidence. However, the company is continuing efforts to meet commitments to its automotive clients and expand its production capacity, though its future remains uncertain.
[Source – 中国金属网]
