Since we heard that things are going badly for Northvolt, I have heard all kinds of very personal opinions on the subject. Like “I knew it wouldn’t work” or “people don’t want electric cars” or “we can see that the technology of the future is hydrogen!” »
In short, everyone says anything, because deep down, we don’t really know what’s going on. It was supposed to be the new Quebec flagship (just like the Lion school buses) and now nothing is going well. What exactly is happening? As someone who is retired and has time to read on the subject, let me explain this to you.
You’ll see, it’s interesting… and a little scary.
Asian superiority
But before we get into that, you need to understand a little about what’s going on in the world of electric car batteries.
Basically, and here’s what’s scary: only Asia is good at this. We are talking here about South Korea, Japan and China. Especially from China. Every year, millions of batteries are manufactured there (9 million in 2023).
No wonder European and American manufacturers, with their low EV production (at least until 2021) were turning to Asia to source their batteries.
Except that there, we are producing more and more EVs. So we say to ourselves: it doesn’t make sense to depend like that on Asia. Something must be done!
As we know little about it and Asia is the undisputed leader, we initially partnered with them to build factories here. GM with LG, Renault with CATL, Ford with EcoPro CAM, etc.
But here we come to the hundred thousand dollar question and it applies as much to Europe as to America: couldn’t we have our own battery factories of our own? No longer depend on Asians?
And it is in this context that Northvolt was born. A company that was neither Korean, nor Japanese, nor Chinese, but 100% European.
You can imagine that she quickly became the darling of Westerners. We all wanted Northvolt factories: in Europe, in the United States and… of course in Quebec.
So why is things bad today?
It’s stupid to say and our pride as Westerners takes a hit: Northvolt cannot produce its batteries as efficiently as the Asians. They have many problems…
It’s flat too! The West is not yet capable of beating Asia, or even matching it. Because it’s all well and good to build battery factories and accept orders from car manufacturers, you also have to deliver the goods!
When a manufacturer places an order with Northvolt to equip a model that will be manufactured in 50,000 or 100,000 units, it has to work! Once the assembly line starts, the batteries must arrive on time! Otherwise, we’ll look elsewhere.
And that’s what happened with BMW last spring. The manufacturer canceled a 2.1 billion euro deal with Northvolt because the batteries did not arrive on time. And that was the beginning of the loss of confidence…
We were certain at the start that Northvolt would succeed in competing with Asian factories, but as soon as we saw that this was not the case, investor confidence began to melt like snow in the sun…
Will Northvolt succeed in resolving its production problems? I hope so and I wish them, because we need non-Asian battery companies! Losing the battery battle could make us very vulnerable to Asia and China in particular.
Supply and demand
The other thing that hurts Northvolt is that since there was a slowdown in electric vehicle sales last year, it’s very difficult to know what’s going to happen in 5 or 10 years.
You can imagine that, if we estimate production at 2 or 10 million EVs per year in North America in 2030, that changes everything! And right now, we don’t really know what’s going to happen…
Will the transition to electric happen quickly, slowly? To what extent will Northvolt become essential in the years to come? The only adequate response in these times is that we will see things a little more clearly in a year or two.
One thing is certain, the outlook remains encouraging for the EV industry. All the specialists say it. This is why I remain optimistic about the future of the battery industry in Quebec.
Sources :
1. https://www.ledevoir.com/economie/820420/passe-il-northvolt
2. https://www.ledevoir.com/economie/820474/analyse-difficultes-northvolt-ont-rien-bien-original
3. https://techcrunch-com.translate.goog/2024/07/20/tracking-the-ev-battery-factory-construction-boom-across-north-america/?_x_tr_sl=en&_x_tr_tl=fr&_x_tr_hl=fr&_x_tr_pto=rq#:~:text=General%20Motors,fund%20its%20battery%20factory%20projects
4. https://www.automobile-propre.com/articles/bmw-annule-une-enorme-commande-de-batteries-aupres-de-northvolt-et-se-rabat-sur-samsung/
