Northvolt is not any abnormal EV battery manufacturer. The company has been recognized as one in every of Europe’s pioneering green tech corporations and was one in every of the primary Startups on this emerging space are receiving support from giants like Goldman Sachs and BlackRock.
But things haven’t been easy for Northvolt recently. Last month, the Swedish company lost a lucrative $2 billion contract from carmaker BMW, which also has an investment in the corporate. The contract went to Samsung as a substitute, underscoring the looming threat of Asian competition for corporations like Northvolt.
Today Northvolt announced that it close its research subsidiary Cuberg in San Francisco and relocated its research and development work back to Sweden.
“Today is a sad day for me, the entire Cuberg family, whom I have known for nine years, and the battery industry as a whole,” said Cuberg founder Richard Wang in a LinkedIn post on Tuesday.
The San Francisco-based company, which emerged from Stanford University in 2015, was acquired by Northvolt three years ago Given the strong demand for electric vehicles, the corporate desires to expand its business in America.
It is unclear what the move of research and development to Sweden means for Northvolt’s U.S. business more generally. The company has encouraged Cuberg employees to use for other positions at its research lab in Sweden and its offices in Montreal, Canada.
Northvolt representatives didn’t return immediately AssetsPlease leave a comment.
Northvolt’s big moment
Northvolt is an enormous player in the electrical vehicle space, working with a number of the biggest automotive manufacturers, from Volvo to Volkswagen.
The company was founded in 2017 by two former Tesla executives and now has $20 billion in debt, equity and grants.
While Sweden just isn’t recent to the automotive industry, Northvolt is a pioneer in Europe’s electric vehicle field. first local company within the battery manufacturing sector, which is otherwise dominated by countries resembling China and South Korea.
The company has expanded its business worldwide in a comparatively short time frame and has established partnerships with large and small automobile manufacturers.
JONATHAN NACKSTRAND – AFP/Getty Images
Surviving the electrical automotive winter
These achievements have recently been overshadowed by a number of the challenges facing the broader electric vehicle market and others which have hurt Northvolt particularly.
For example, delivery delays have influenced Swedish truck maker Scania is attempting to expand its electric vehicles. Its predominant plant in Skellefteå, Sweden, has fallen behind in its production plans and just isn’t expected to succeed in full capability until the second half of the yr. until 2026which, if achieved, could produce 16 gigawatt hours – enough to power 272,000 cars.
Regardless, there have been also concerns in regards to the Safety of employees at Northvolt’s factories following incidents that resulted within the deaths of several employees (the corporate was unable to determine any connection between their deaths and work on the factory).
The EV industry is mostly experiencing a slump asked as a result of as a result of higher rates of interest, which also affect the demand for batteries. This has exacerbated Northvolt’s financial problems. Northvolt reported a lack of $1.2 billion in 2023, almost 4 times the lack of $285 million within the previous yr.
The Swedish giant announced that it could postpone its IPO timetable. Target is 2025.
Some of those problems have actually hurt other battery manufacturers as well. Automotive Cells Company, a battery manufacturer backed by Stellantis, has stopped the development of factories in Germany and Italy. Volkswagen has also scaled back its efforts to construct recent battery factory capability.
A confluence of those aspects led to a strategic review of the European battery manufacturer’s business activities. in JulyAccording to Reuters, there could potentially be a delay in the brand new factories led by Northvolt, because the review will even include an “assessment of timelines and capital allocation.”
“We were a bit too aggressive with our expansion plans and are now reviewing that,” CEO Peter Carlsson told Swedish newspaper Dagens Industri last month.
The review is anticipated to be accomplished in the autumn.
Northvolt’s role within the European electromobility offensive is undisputed. But where Northvolt goes from here may rely upon how well the corporate overcomes operational setbacks and rethinks its global expansion in battery production.
