According to the Financial Times, at a time when the growth of the European electric car market is slowing, Swedish battery start-up Northvolt is struggling to get the latest round of financing support, and the Swedish government has ruled out the possibility of financial rescue for Northvolt.
Ulf Kristersson, Sweden’s centre-right prime minister, said on September 16th that the Swedish government wanted to position itself as a leading country in the transition to green.
Start-ups such as Northvolt and H2 Green Steel are based in Sweden and supply parts to well-known groups such as Volvo and Atlas Copco.
Asked if the Swedish government would help save Northvolt, Ulf Kristersson said: “the Swedish government is not involved in private companies’ business plans, but Sweden does want to be an ideal place for the battery industry.
” Ulf Kristersson added: “it is impossible for the Swedish government to intervene in the financing of Northvolt and become a shareholder.
At present, the decision is in the hands of Northvolt shareholders.
” Unlike the generous support provided by Germany and Canada, much of which is in the form of loan guarantees, Northvolt executives say the company has received relatively little support from the Swedish government.
“We are not dependent on substantial subsidies from the Swedish government,” said one of the Northvolt executives.
Northvolt,Northvolt is Europe’s great hope in the battery industry against China’s Ningde era and BYD, Japan’s Panasonic and the United States Tesla.
At the end of 2021, Northvolt’s super factory in Skellefte å, Sweden, began to produce batteries locally, making Northvolt the first European company to localize battery production, but so far the company has been trying to expand its production scale.
Northvolt is still losing money and is eager to raise new funds.
In addition, the company plans to cut jobs and close parts of the Skellefte å plant, while considering delaying the construction of three other super-factories in Sweden, Germany and Canada.
Since its inception in 2017, Northvolt has raised more than $15 billion, making it the largest private start-up in Europe.
However, Northvolt is trying to drum up support for its latest round of financing amid concerns about the future of electric vehicles and growing concerns about the company’s own financial position.
Earlier, automakers such as Volkswagen Group and Volvo Motor, the largest shareholder in Northvolt, had warned of slowing growth in electric vehicle sales.
Earlier this year, BMW, one of the earliest supporters of Northvolt, cancelled a $2 billion contract with the company because of delivery delays.
Critics have questioned the risks of Northvolt and other Swedish companies that need huge amounts of money but demand has been volatile.
Peter Carlsson, CEO of Northvolt, pointed out that the company’s woes are related to the future of European manufacturing and its ability to compete with China and the United States in green industries.
“if Europe doesn’t want to be a museum, it needs to support industries and companies like Northvolt,” said a person familiar with the matter.
Freyr, a battery maker based in neighboring Norway, has shelved its plant in Norway to give priority to plans in the US, where it should receive generous subsidies under President Joe Biden’s inflation reduction Act.
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