Northvolt, a Swedish lithium-ion battery manufacturer, long heralded as a trailblazer in European battery cell production, is now navigating choppy waters. As carmakers worldwide shift their battery sourcing away from China, Northvolt has faced a series of setbacks, culminating in a reported $1.2 billion annual loss in 2023, a stark increase from its $285 million loss in 2022.
On Tuesday, Northvolt announced a strategic review aimed at reassessing its timelines and capital allocation to optimize capacity build-out. This comes as the company grapples with significant hurdles, including the cancellation of a €2 billion order from German carmaker BMW and a review of its plans for a second Swedish gigafactory.
Chief Executive Peter Carlsson, in a candid interview with business daily Dagens Industri, acknowledged the company’s overly ambitious expansion plans. Northvolt, which has raised billions and is contemplating an initial public offering, may delay planned facilities in Heide, Germany, and Montreal, Canada.
“We have been a little too aggressive in our expansion plans and that is what we are now reviewing,” Carlsson said.
Northvolt’s first factory in Skelleftea, Sweden, is still ramping up to full production capacity, now anticipated by 2026. The success of this flagship facility is critical before proceeding with other projects.
“We need to reassess subsequent steps, and that is currently in progress … In order to move forward in Germany and Montreal, it’s fundamental we’ve made Skelleftea the parent plant on which the plan is based,” Carlsson emphasized.
Despite the challenges, Northvolt saw a slight increase in net sales, rising to $128 million in 2023 from $107 million in 2022.
As Northvolt navigates these turbulent times, its path forward will be closely watched by the industry, which sees the company as a key player in reducing reliance on Chinese battery manufacturers.
(Source: Financial Post | Reuters | Bloomberg)
