Will a consortium of investors support Northvolt?

This was reported by the news agency Bloomberg, citing insiders.
Goldman Sachs Asset Management is Northvolt’s second-largest shareholder and, according to Bloomberg, is actively involved in finding a solution to the Swedish battery manufacturer’s “liquidity crisis.” There is talk of Northvolt needing 200 million euros to address its short-term needs – around 150 million euros are said to have already been secured through verbal commitments, the news portal reports.

A Northvolt spokesperson declined to comment to Bloomberg. On Tuesday, the company announced that it was making progress on the financing package and was continuing to work “intensively” on the proposal. Co-founder Harald Mix had already announced in a Swedish newspaper commentary that he had provided more than 1.5 billion Swedish kronor (144 million dollars) in fresh capital.

Northvolt has come under increasing pressure since the summer. At that time, it became known that shareholder BMW had cancelled an order for battery cells worth billions – apparently because the Swedes were behind schedule and BMW would no longer need the ordered prismatic cells at a later date. The Munich-based company is switching to round cells for the upcoming electric cars based on the Neue Klasse. The events surrounding the BMW order led to founder and CEO Peter Carlsson admitting that he had been “a little too aggressive” with his expansion plan. The focus was thus placed on supplying customers from the first Northvolt Gigafactory site in Skellefteå – further expansion was put to the test.

However, this was just the start of a whole series of changes. A new CFO, Pia Aaltonen-Forsell, was appointed in July because her predecessor, Alexander Hartman, will revise expansion plans as Chief Transformation Officer. When a top manager is permanently assigned to this task alone, it is clearly no easy task. The newly formed management team has also decided to make its first cuts: In August, the research centre in California, which Northvolt had taken over in 2021 along with Cuberg, was closed down. In September, secondary businesses such as cathode material production and a battery storage plant were deprioritised to strengthen the core business – the production of battery cells. 1,600 jobs will be cut at three Swedish sites, and 20 per cent of jobs will be cut internationally.

At the beginning of October, Northvolt announced that the subsidiary Northvolt Ett Expansion AB, responsible for the cancelled factory expansion, had filed for insolvency. The German Manager Magazin now writes, citing people involved, that this subsidiary was responsible for bundling production for Audi and BMW. “Audi, too, as confirmed by high-ranking Group and brand managers, has therefore initially withdrawn its order from Northvolt,” the article states.

Bloomberg states that Goldman Sachs’ involvement is intended to give other investors a sense of security and persuade them to also participate in the necessary financing. It is not only pure investors who are involved in Northvolt, but also customers such as the Volkswagen Group and BMW. It means that there are also vastly different interests among the shareholders. While BMW has postponed its plans to purchase battery cells from Northvolt, the VW Group depends on the cells – for example, for Scania’s electric trucks or Porsche’s upcoming two-seater sports cars.

Although VW had already hinted at helping Northvolt to scale up cell production in its factory, major financial injections from Wolfsburg seem rather unlikely in view of its own cost-cutting plans and the public censure of German plants. A Scania spokesperson told Bloomberg they are “in close dialogue with Northvolt” but could not comment further.

bnnbloomberg.ca, manager-magazin.de (in German)