Northvolt Might Slow Battery Projects Due to EV Slump
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Northvolt AB may slow its battery projects, the latest in a line of industry reassessments after the transition to electric cars cooled.
The Swedish manufacturer could push out the ramp-up timelines at its four major sites, CEO Peter Carlsson said July 2.
Aside from its most advanced plant in northern Sweden, the company is developing a factory with Volvo Car AB near Gothenburg and a site in Heide, Germany. It also committed to establishing a cell plant in Montreal.
Northvolt is examining its long-term strategy “both from a capital allocation point of view” as well as working out “realistic time plans for these projects between the customers,” Carlsson said.
Carlsson
Slower-than-expected demand for electric cars has prompted automakers to tweak model rollout plans and walk back ambitious goals for electrification. The ripple effect from these changes is starting to spread, with battery projects being pushed out and material suppliers Umicore SA and BASF SE canceling projects.
Additional hurdles have also gone up for Northvolt, Europe’s most advanced homegrown battery maker. Long-standing battery rivals in Asia, such as China’s BYD Co., have made strides on improving cheaper lithium-iron-phosphate batteries, broadening the types of vehicles they can be used for and undermining Europe’s own battery industry efforts.
Northvolt is also dealing with internal problems in the transition to full-scale production. Customers like Volkswagen AG’s Scania have complained of delivery delays, while BMW AG has backed out of a $2.1 billion battery order because of quality concerns, dealing a blow to the region’s efforts to establish an independent EV supply chain.
The manufacturer’s operating loss more than tripled to $1.03 billion last year, Northvolt said, as the company dealt with “multiple challenges and setbacks” while seeking to scale up output at its Ett factory, Carlsson said in a statement.
Revenue slightly advanced to $128 million last year, up from $107 million.
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Still, Northvolt on July 2 said it’s targeting 25% market share in Europe by the end of the decade, equivalent to about 150 gigawatts of production capacity.
Last month, Bloomberg reported that plans for an initial public offering had been pushed to next year because of a challenging market for listings and the operational difficulties in scaling up production. The company is also losing its chairman, veteran industry leader Jim Hageman Snabe, at a critical time.
Snabe, who also chairs Siemens AG, won’t return after six months of sick leave. The Dane had been picked for the position in 2022, in an effort to build a more independent board with an industrial track record ahead of a potential IPO. Existing board member Tom Johnstone is taking over.
