Just below the Arctic circle, Northvolt’s flagship battery factory was once a beacon of European ambitions that could power the future with clean energy. But follow the company’s recent Bankruptcythe final production line Silenced.
Still hope the buyer will be resurrected The fate of small towns in Sweden Depends on Northvolt’s success. Silicon Valley startup Lyten has Roof on the Polish plant in North Voltand Swedish truck manufacturer Scania Expressed interest Establish a consortium to acquire its R&D facilities.
One thing is certain, however: While neither the EU nor Sweden will save North Volt, and despite being the best startup in Europe, they have received a $15 billion funding commitment from investors and governments.
Despite a lot of capital, how the two former Tesla executives founded companies managed to fail would be a case study of business schools. It also raises questions about whether the government supports its former battery champions enough and how Europe can modify its approach to competing with China in high-growth, low-carbon industries.
What’s wrong?
While both Canada and Germany have provided significant support and grants to Swedish companies, their home country has been largely abstained, understandably Make a criticism From shareholders and former executives. After all, major Chinese industries have long benefited from state aid, which helps them maturity to reduce costs per unit cost 30% lower More than European-made batteries.
However, given that Northvolt’s funding is already good, it is unclear whether more financial support will have a decisive impact. Craig Douglas, partner at Climate Technology Ventures, said World FundNorthvolt’s problems are more related to the difficulties with China and the mistakes caused in the process.
“If you want to expand new production capacity in the commoditized market, then your execution has to be spectacular; Northvolt is not,” Douglas said. “They continue to scale up and geographically expand their actual production capacity. They don’t increase yields and delivery times are delayed, so they can’t compete.”
As a result, car customers began to lose confidence. BMW A major blow Cancel US$2.15 billion order In delay. Scania must ensure Alternative supply As North Vaugh strives to improve output as it is electric fleet.
even publicOwning 21% of the shares in North Volt, eventually losing confidence, Its investment was significantly written In 2024, move forward along your own subsidiaries Powerco– This move underscores the ongoing demand for local batteries.
Northvolt co-founder Peter Carlsson resigned as CEO after the company filed for Chapter 11 bankruptcy. Although the company’s challenges are multifaceted, he has to Take responsibility Because it eventually appears in this case.
The success or failure of the EV sector in Europe
Northvolt’s failure is undoubtedly a blow to the wider ecosystem. For Douglas, “this will make many larger investors nervous about the scale of the future and stakeholders will focus more on expanding manufacturing risks than before.”
“If you want to expand new production capacity in the commoditized market, your execution must be spectacular; Northvolt’s execution is not.”Craig Douglas, partner at Climate Technology Ventures World Fund
However, it is important to remember that Northvolt is not the only extension in the game. “It’s not because some people struggle like North Volt, it’s the end of the game. Europe needs to continue pushing.” Said recently. His startup, Annoying,Depend on Renaultand received $2.15 billion Build electric battery in Dunkirk, France.
Verkor once appeared as the French Northvolt, slower than his previous companions. Although its pilot line in Grenoble is making cells (the basic unit that stores energy in the battery) in Dunkirk Not started yet.
This means Verkor is still in a critical transition phase, but now at least it can be relied on Brussels’ help.
The European Commission recently announced that it would allocate about $1 billion in grants To six electric battery projectsas it attempts to level the playing field and support Europe’s transition to a clean, competitive and resilient industrial base. This includes Verkor, but also Novo Energy, a former joint venture between Northvolt and Volvo Cars, the latter recent tOOK Full Ownership; Cellforce, by Porsche; and ACC, by Stellantis and Mercedes Benz.
“It’s not because some people struggle like North Volt, but the end of the game. Europe needs to continue pushing.”Benoit Lemaignan, French entrepreneur and co-founder Annoying
“There are enough examples in history that it’s rare to catch up too late, but the question is whether we are willing to do competitive things,” said Andreas Fischer, founding partner of Deep Tech Tech VC. The first motivational adventure. He believes that this will require substantial investment in the entire European electric vehicle industry rather than trying to choose a “winning” company.
Protectionism, professionalism and long-termism
This is the International Energy Agency (IEA) view that we are at a “manufacturing or disrupting” moment for the European battery industry. Although China (with extensive manufacturing knowledge and supply chain integration) now produces three-quarters of batteries worldwide, in addition to blanket subsidies, there are a few ways to build a more competitive battery industry in Europe.
“Everyone starts by ensuring strong domestic demand, which gives manufacturers time to hone their production processes and develop a strong regional industrial ecosystem. In this regard, clear policies show that continuing demand growth and reducing investment risks is crucial.” Write Earlier this year.
Fischer added that policy support for the European battery industry also needs to involve relaxing regulations or turning to protectionist policies, such as Carbon boundary adjustment mechanisman EU system that confirms that the price has been paid for carbon produced for certain imported commodities, which will be fully applicable from 2026.
Douglas agrees – “Things like CBAM or local content requirements can help create a level of competitive environment and add local value with clearer value” but still thinks it’s hard for Europe to compete in two major types of lithium-ion batteries currently used in electric vehicles: LFP (LITHIUM IRAPHATE), priced at LFP, priced at a difficult price Falledespecially in China; and NMC (Nickel Manganese Cobalt Oxide), South Korea and Japan have developed Strong expertise.
Instead, Douglas believes that Europe has better opportunities in high-end cells and new cytochemistry. He also pointed to other related industries where the price gap with China is either smaller or less important: “Decarbonized industrial manufacturing, recycling and recycling, biotechnology and agricultural technology, as well as innovation in energy business models have all started well in Europe.”
Nevertheless, if Europe wants to establish supply chains that are critical to its sovereignty, EV batteries and beyond, North Volton’s collapse exposed the scale flaws need to be addressed.
According to Herbert Mangesius, one of them VsquaredWestern venture capital ecosystems should better understand the difficulty of establishing economically viable production systems in terms of scale and maturity in China. “It is crucial that appropriate risk management and supervision are engraved in the governance structure, i.e. the ability to judge relative to budgets,” he warned.
Mangesius added that at the system level, cheap energy and skilled labor are also necessary “benchmarks” for competitiveness. It may take time to achieve these goals, but it is itself a lesson in how Chinese people build their own thriving industries. “China shows consistency in industry policies, which allows reliable and competitive ecosystems to be established, especially in the field of clean technology,” Mangesius said.
