Troubled Swedish battery maker Northvolt announced today that it is filing for bankruptcy in the US, dealing a blow to Europe’s ambitions for indigenous lithium-ion batteries.
Company Allegedly Chose Chapter 11 in an attempt to fix my finances.
North Vault, which had been growing for years thanks to strong fundraising and announcements about new facilities, has stumbled of late. It laid off 1,600 employees in September, about 20% of its workforce, and shed assets from its ill-fated purchase of Bay Area battery startup Quebec in November.
The company has raised $14.26 billion, according to the pitchbook, including a $1.2 billion round in 2023 to expand operations in North America. But this was not enough to sustain the cash-strapped operation. Company Allegedly $100 million was burning every month. When BMW pulled out of the $2 billion deal in June after the North Volt failed to deliver on time, bankruptcy became almost inevitable.
It’s not the first time a battery-manufacturing startup has hit a rough patch — the failure of A123 Systems a decade ago Standing outside As a prominent example in America – and it likely won’t be the last. Making lithium-ion cells is extremely difficult, requiring in-depth knowledge of chemistry, production equipment, and quality improvement. Even well-known companies run into costly problems, sometimes up to $1 billion. NorthVolt’s bankruptcy is probably a sign of poor execution in the face of lower-than-expected demand for EVs.
Is this the end for the Swedish company? Not necessary. For one, Volkswagen owns part of the company, and has made a big bet on EVs, which will require millions of sales. In addition, Europe, like other developed economies, is rushing to claim the battery manufacturing space, and NorthVolt sees a great opportunity to compete with Asian competitors. It could still happen, perhaps through some kind of partnership with one of those competitors, but first it has to get its house in order.
Credit : techcrunch.com
