behind the scenes of the bankruptcy of the European battery giant

If the electric car market develops, despite a slight stagnation, we obviously need to be able to keep up with regard to batteries. This is how many companies specializing in the field share part of the pie, such as Northvolt, Swedish company founded in 2015 and whose first factory was inaugurated in its native country in 2021.

A bankruptcy that is a foregone conclusion

Except that in reality, the latter is still far from running at full speedaccumulating delays, which led to numerous cancellations of orders, particularly from BMW. As a result, the Scandinavian giant had to suffer considerable losses, and is now placed in safeguard procedure, in order to do everything to avoid a planned bankruptcy. A system similar to that put in place for Fisker, which should allow Northvolt to find ways to bounce back.

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But this will unfortunately be far from easy for the company, which nevertheless continues to collaborate with heavy goods vehicle manufacturer Scania. Because an article published by Les Echos draws up a damning list of the numerous strategic errors which have caused its descent into hell for several months. One of them, which is largely responsible for Northvolt's situation, is its desire to do too much, by multiplying contracts. Problem, just the one signed with Volkswagen actually hid five different orders.

Because as the journalists remind us, “ a Scania truck does not require the same batteries as a Porsche, Volkswagen, Skoda or Audi “. Additionally, the firm also worked with BMW, which has its own specific needs. The problem is that Northvolt must produce six different types of batteries, with only two pilot lines. Obviously, it gets stuck. A former engineer explains that “ it took between one and two weeks to adapt a line to a product “. Then, it was then necessary to reach ten months for a return from the customer.

This greatly complicates the ramp-up of production, which is nevertheless essential to be able to hope to compete with Chinese giants such as CATL or BYD. Moreover, the rumor of sabotage carried out by the Middle Kingdom has been growing for several months. The reason? The machines supplied by the Chinese company Wuxi Lead are extremely difficult to resolveso much so that a specialist must come on site. And again, it's very complicated.

A succession of failures

Because according to the former engineer, “ to modify a setting, you have to stop the entire production line, wait three hours for the Chinese expert to arrive on site. Or wait until the next day if it is outside of working hours “. Except that it then happens that when restarting, another problem appearswhich requires starting the process again. Especially since the Chinese experts don't speak a word of English, which requires using Google Translate. An almost absurd situation.

Result of all these slowness, BMW has thrown in the towel after investing more than 2.5 billion euros. Fortunately, there are still several companies in Northvolt's capital, including Volkswagen, which owns 21% of the company's shares, as well as Goldman Sachs (19.2%). In addition, the company specializes in NMC (nickel – manganese – cobalt) batteries, while many manufacturers choose to turn to LFP (lithium – iron – phosphate) chemistry, such as Stellantis. Which also plunged the French firm ACC into great difficulties.

Many cells must be thrown away, just as is the case with the Swedish giant, which has had difficulty coping with waste management, which also costs it crazy amounts of money. Now, Northvolt has made the decision to cut 1,600 jobs and cancel its cathode plant, although it plans to continue building its assembly sites in Canada and Germany. It is still possible for it to raise the bar, since Les Echos recalls that in its beginnings, the Tesla gigafactory threw away 84% of its production. But the path will be far from simple, especially since the CEO of the Scandinavian firm has just left office.