Chinese battery maker CATL, the global leader with a market share of almost 40%, has started talks with Northvolt, the Swedish company in financial difficulties. The talks could lead to a strategic partnership aimed at reviving Northvolt, which has filed for bankruptcy protection in the United States. The Swedish publication Dagens Nyheter, citing unnamed sources, published the report.
Northvolt crisis: reasons for collapse
Northvolt, founded by Peter Carlsson, a former Tesla executive, has over the years attracted around €30 billion in funding and has firm contracts with several giants of the automotive industry, including BMW. However, a series of logistical and financial problems have severely plagued the company, culminating in the termination of a €2 billion contract by BMW in June 2023. This termination was due to Northvolt’s inability to meet delivery deadlines. Northvolt is now in urgent need of a €1.2 billion investment to continue production and honor outstanding orders.
CATL, a life-saving solution?
CATL (Contemporary Amperex Technology Co. Limited) is the world’s largest manufacturer of batteries for electric vehicles and a pillar of the global market. Through this negotiation, the Chinese company could become a major shareholder in Northvolt, strengthening its position in Europe, a key market for the electric vehicle industry. “Talks with Northvolt not only provide the opportunity to support a competitor, but also to expand our presence in Europe, a strategic region for electric vehicles,” could be a strategic insight attributed to CATL, according to analysts.
The future of Northvolt and the impact on industry
Northvolt was perceived as a strong rival to Asian manufacturers such as CATL and LG, thanks to financial backing from companies such as Volvo. The Swedish company was seen as a symbol of Europe’s independence in energy storage technologies. However, the current crisis raises questions about the sustainability of major projects in the battery industry and the ability of European startups to compete with Asian giants. “If Northvolt is rescued, it could remain a symbol of global collaboration in green energy, but also an example of the risks associated with the emerging battery industry,” commented economic analysts. For now, Northvolt’s future depends on the outcome of these critical negotiations.
