Employees of the Northvolt factory in Skelleftea in Sweden. Photo credit MaxPPP.
The development of European electric cars must obviously go through that of battery manufacturing on the Old Continent, while most local brands currently use accumulators manufactured in China or South Korea. And among the major construction projects for European battery manufacturing plants, that of the Swedish company Northvolt was the most important and regularly shown as an example to illustrate the progress of our industry.
Unfortunately, Northvolt has just filed for bankruptcy. While she has already swallowed more than 13 billion euros in fundraising since 2016 as the journalists of Le Monde point out, it now lacks liquidity and can no longer ensure production for the year 2025. This is a monumental setback for this gigantic company, supplier to several European manufacturers including BMW which was to receive its accumulators for its new models from the “Neue Klasse” platform from next year.
But why this bankruptcy?
Northvolt managers explain this bankruptcy by problems linked in particular to major start-up delays, partly due to Chinese industrial machines delivered to the site which did not work as expected. The decline in demand from car manufacturersfollowing significantly fewer sales than expected of European brand electric cars, obviously did not help matters. BMW had also recently canceled a two billion euro order from Northvolt, citing however scheduling problems rather than this drop in demand.
As the journalists from Les Echos point out, Northvolt also suffers from very strong competition from Chinese industries, which completely cut the prices of their batteries for export due to overcapacity in their production. The recent emergence of LFP (lithium-iron-phosphate) battery technology, reputed to be less expensive and mainly mastered by the Chinese, is also a factor: Northvolt only produces lithium-ion batteries using NMC chemistry (nickel-manganese-cobalt), more expensive. This technology is also known to be better in terms of performance and is more intended for high-end models. Criticized for its excessively high price, the Fiat 500e must, for example, switch to LFP batteries and it is also rumored that other European automobile groups could soon do so for their urban models. The Citroën ë-C3, like the future ë-C3 X, Opel Frontera Electric and other Fiat Grande Panda, already uses LFP batteries but manufactured in China by Svolt.
Other large battery manufacturing plant projects in Europe, such as ACC financed by Stellantis, Mercedes and Total, are falling behind in their development plans due to falling demand. Not easy, the development of the European electric car industry…
