It's the end of Northvolt, the most promising European battery company
Every week, the battery landscape shifts in fascinating ways — this one is no different.
Welcome back to another edition of my newsletter! - Week 11 2025
It’s the end of Northvolt. The Swedish company is ceasing operations. Northvolt struggled for years to ramp up its production at Northvolt Ett. In this article, I will mostly tell about Northvolt’s story from its beginning to the end.
Summary
The Highlight of the week: Northvolt’s fail
Battery Industry Pulse: Weekly Roundup.
The Highlight of the week: Northvolt’s fail
Northvolt filed for bankruptcy in Sweden this week.
The entities Northvolt AB, Northvolt Ett AB, Northvolt Labs AB, Northvolt Revolt AB and Northvolt Systems AB filed with the Swedish court.
The Swedish company was the most promising European company in the battery industry.
They were ambitious. They wanted to produce the “world's greenest battery”
Now, let’s trace back to the beginning of Northolt’s story until today.
Northvolt was established in 2016 by former Tesla executives Peter Carlsson and Paolo Cerruti.
Peter Carlsson was Head of Sourcing at Tesla and Sony Ericsson. Paolo Cerruti was VP Global Supply Chain and Operations planning at Tesla and Director of Purchasing - Powertrain at Renault-Nissan.
Did you know that Northvolt is not the company's original name?
The original name was SGF Energy AB and then renamed Northvolt in 2017.
Northvolt partners and investors
Major companies invested early in Northvolt, believing in its ambitious goals and mission.
Scania partnered with Northvolt early on to develop battery technology for commercial vehicles in 2018.
In 2019, the Volkswagen Group and Goldman Sachs led a $1 billion equity capital raise for Northvolt, alongside BMW Group and other companies.
In 2021, Northvolt received a $14 billion battery cell order for its Swedish gigafactory from Volkswagen.
VW group holds 21% shares and Goldman Sachs 19,2%, making them the largest shareholders.
In total, Northvolt raised $15 billion and secured $50 billion, having everything a new company could want.
Northvolt facilities and projects
From 2017 until today, Northvolt revealed several battery projects, not only in battery cell manufacturing but also recycling, lithium, anode and cathode.
2017
Northvolt announced its first battery facility in Sweden. The company's first battery factory is called Northvolt Ett (which means one in Swedish). The factory is located in Skellefteå, Sweden.
2018
Northvolt kicked off the construction of Northvolt Labs which was completed in 2019. It’s Northvolt’s demonstration line and research facility. It’s very common in the industry to start with a demonstration/pilot line to test and master the processes.
2019
Construction at Northvolt Ett began in October 2019.
In cooperation with the Volkswagen Group, Northvolt announced plans to establish a second gigafactory with an intended location in Lower Saxony, Germany. However, VW decided later to build the factory on its own.
In December 2019, Northvolt announced that it would establish its first pilot recycling plant in Västerås, Sweden, in 2020. A full-scale recycling plant at Northvolt Ett gigafactory in northern Sweden will be established by 2022.
2020
Northvolt and Hydro announced the formation of a joint venture, Hydro Volt, to do recycling pre-treatment.
BMW Group has signed a long-term supply contract worth 2 billion euros for battery cells with Northvolt. BMW canceled the order in 2024 as Northvolt was unable to fulfill this order. The 2 billion euro deal was given to Samsung SDI.
2021
The first cell came off the cell assembly line of Northvolt Ett.
Northvolt invested $200 million in Poland for an energy storage systems facility.
Northvolt and Volvo announced a joint venture to build a battery factory. It’s the second factory for Northvolt.
Northvolt acquired Cuberg, a U.S.-based battery technology company focused on lithium metal.
Northvolt has produced its first battery cell with 100% recycled nickel, manganese and cobalt.
Galp and Northvolt established a joint venture ‘Aurora’ to develop a lithium conversion facility in Portugal.
2022
The Northvolt Ett's first delivery of lithium-ion battery cells was made in May.
Northvolt acquired a closed paper mill in Sweden to produce cathode active materials. The goal was to produce up to 100 GWh of cathode material.
Northvolt announced its third battery factory to be built in Germany, called Northvolt Drei.
Stora Enso and Northvolt have entered into a joint development agreement to create a sustainable battery featuring anode produced using lignin-based hard carbon produced from Nordic forest wood.
2023
Northvolt announced plans for Northvolt Six, a $5 billion battery plant in the Montreal region of Quebec, Canada.
2024
Northvolt started the construction of Northvolt Drei.
In September 2024, Northvolt announced a strategic review. The company decided to put all its focus on ramping up the first phase of the Northvolt Ett gigafactory, in Sweden. At the same time, they are stopping the production of the cathode active materials at the factory and will sell the mill paper facility they bought in 2022. Northvolt has also communicated its intention to integrate its subsidiary Cuberg and lithium metal technology into Northvolt Labs, Sweden. They will try to sell its Poland ESS assembly plant and find partners for its German battery plant. Northvolt laid off 1,600 employees, including 1,000 in Skellefteå
Two months later, Northvolt filed for Chapter 11 reorganization in the United States. The goal was to access to new funding.
2025
In January 2025, Volvo Cars took full ownership of NOVO Energy, its JV with Northvolt.
March 12th, 2025, Northvolt filed for bankruptcy in Sweden.
In 8 years, Northvolt announced several projects in a short lap of time.
Only, Northvolt Ett was built with a 16 Gwh annual capacity. They were struggling to ramp up the production of the factory. They ran out of cash.
Northvolt mistakes
The main reason Northvolt failed is the lack of focus and experience. Human and financial resources were put on too many projects. The projects were too big. The company wanted to be vertically integrated. A good strategy but it takes time. First, you need to master your core business.
They were struggling with the ramp-up of their first battery plant in Sweden. They were in the “valley of death” and stayed for too long in it.
According to several media, Northvolt made the following mistakes:
Internal communication issues with Asian workers (Chinese and Korean) who had battery experience.
Communication issues with its main Chinese equipment supplier.
Lack of battery cell expertise.
Recycling processes were not scaling as expected, partly due to technical setbacks.
Management’s underestimation of the complexities involved.
and more….
All led to the ramp-up issues.
“We can raise a factory’s battery yield to 96% in just four months. Northvolt took four years and only achieved 70%,” said a Chinese executive after a recent interaction with Northvolt. - From Kr-Asia media
According to a recent report of Fraunhofer FFB and RWTH Aachen University, each percent of scrap rate costs about 30k euros a day. It's about 10 million euros a year.
Usually, the scrap rate is around 30% in the first year and decreases over time.
That’s why Northvolt ran out of money.
It’s a strong reminder to the newcomers. Producing battery cells is complex and costly. Experience and expertise are key.
In my opinion, European battery companies should cooperate and collaborate more rather than isolate and do everything by themselves.
The European battery companies should learn from Northvolt’s story.
It’s a big loss for Europe.
If you are more interested to understand western battery companies mistakes, I wrote an article couple weeks ago.
I want to express my deepest sympathy to Northvolt’s employees for the hardships you’re facing in these uncertain times. It saddens me to see Northvolt in such difficult circumstances. Let’s hope that a strong battery player will buy Northvolt’s assets, especially Northvolt Ett.
Potential employers don’t hesitate to share your open positions in comments on Substack to help Northvolt’s employees.
Now, let’s look at this week's battery market developments.
Battery Industry Pulse: Weekly Roundup
Components
L&F's 3.52 Tril. Won Deal Marks Milestone in High-nickel Cathode Material Supply
Shanghai Putailai will not proceed with its plans to build an anode factory in Sweden
Battery
Thailand Approves Sunwoda to Invest More Than US$1 billion in EV Battery Cell Plants
Samsung SDI to raise $1.4 bn in rights offering for facility expansion
Farasis unveils battery tech that supports 6C ultra-fast charging
Battery Equipment
BESS
Samsung SDI Secures 437 Bil. Won ESS Supply Contract with U.S. Power Giant
BYD signs deal to build energy storage project with capacity of up to 1.6 GWh in Poland
Passengers EVs
Commercial EVs
Charging infrastructure
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I have had the pleasure of knowing Peter since 2006, and it's unfortunate to see him struggle due to overextending himself with multiple projects. Despite his enthusiasm and vision, he seems to have bitten off more than he can chew, putting a strain on his resources and cash flow.