While the Swedish electric battery manufacturer Northvolt is on the verge of bankruptcy, the company ACC, nicknamed the Airbus of batteries, has suspended its projects in Germany and Italy and is experiencing a very slow start to its production in France. As for the Taiwanese ProLogium factory in Dunkirk, it will not be operating at full capacity in 2030.
Barely launched, the electric battery manufacturing sector in Europe is already experiencing difficulties. The sector is strategic for the EU, which is banking on the massive deployment of electric vehicles to reduce its CO² emissions. To power them, battery production capacities on the continent will have to exceed 500 GWh (Gigawatt hours) by 2030 to satisfy domestic demand. The issue of sovereignty is important for the Twenty-seven, whose global market share in the manufacturing of these batteries is limited to 7%, far behind China at 76%. But ramping up battery factories in Europe is proving much more difficult than expected.
And first of all for Northvolt. After announcing the elimination of 1,600 jobs at the end of September, or nearly a quarter of its workforce, as well as freezing the development of its main production site in Sweden, the Swedish manufacturer of batteries for electric vehicles requested to be placed under Chapter 11 of the United States Bankruptcy Law. The goal: to protect itself from its creditors and facilitate its reorganization, in particular to restructure its debt, which amounts to 5.8 billion euros. The company is also looking to raise more than a billion euros, as its liquidity is currently limited to just 30 million euros.
Several causes are put forward to explain its difficulties. Northvolt is accused of having developed mega-factory projects in Sweden, Germany and Poland, even though it does not fully control its manufacturing process. As a result, delays in deliveries to its customers accumulated and deteriorated its cash flow, due to lack of cash flow. Worse still, Volkswagen, the company’s largest shareholder with 21%, canceled a 2 billion euro order last May in the face of these delays. Northvolt is also criticized for having chosen NMC (Nickel, manganese, cobalt) technology for its batteries, while LFP (Lithium-iron-phosphate) batteries, which are less expensive, are more in demand by automobile manufacturers.
Additional time to industrialize LFP battery technology
Nicknamed “the Airbus of batteries”, ACC (Automotive Cells Company) also had a difficult start. The company suspended its factory projects in Germany and Italy last June. The reason given is the time required to modify the manufacturing process and achieve industrialization of LFP technology. Its first production site, located in Douvrin in Pas-de-Calais and which manufactures NMC type batteries, is struggling to increase its production rate, twelve months after its start-up. According to information collected by Challenges, the volume produced in 2024 will only be able to equip 2,000 to 2,500 vehicles. But this situation is not surprising, according to an expert interviewed, who explains that “Chinese big names like the world number one battery maker CATL encountered the same difficulties in their early days and Northvolt has identical problems. »
-Despite these setbacks, ACC still managed to finalize fundraising of 850 million euros to continue the development of its factory in Douvrin. The objective is to create a second production line with a capacity of 13 GWh, compared to 15 GWh for the first and whose production is planned for the end of 2025. Except that at the same time, Stellantis, while it is one of the company’s co-shareholders alongside Mercedes and TotalEnergies, announced that it would invest more than 4 billion euros with the Chinese CATL to build a new LFP battery factory in Zaragoza, Spain. Production is expected to begin at the end of 2026 and could reach a capacity of 50 GWh.
As for ProLogium Technology, the Taiwanese manufacturer presented a year ago a mega-factory project with a final capacity of 48 GWh in Dunkirk. But production, scheduled to start in early 2027, will start slowly, since the company has announced that it will start with a capacity of between 2 and 4 GWh and that it should reach between 8 and 16 GWh by horizon 2030. Note that this manufacturer has developed its own lithium-ceramic solid-state battery technology.
Image credit of one: Ernest Ojeh – Unsplash
