Northvolt holds onto prospect of short-term financial boost of $300 million

According to media reports, the Swedish company is expected to close a financing round totalling around 300 million dollars in the coming week. A person familiar with the matter told Bloomberg that the troubled battery cell manufacturer wants to use this to put its finances on a more stable footing.

However, it is still unclear whether the deal will actually be finalised next week: due to the complex documentation for the deal with customers, investors and lenders, the final steps could still take some time.

Earlier this month, it became known that the investment subsidiary of the major US bank Goldman Sachs is reportedly considering rescuing the ailing battery manufacturer Northvolt together with other investors. And it is precisely this consortium that is probably now involved: as part of the rescue financing, both new equity and new loans are in prospect, reports Bloomberg. Northvolt itself declined to comment to the news agency. The financial injection would give Northvolt time to stabilise production and establish longer-term financing.

Meanwhile, there is some good news on the customer side: truck brand Scania, which belongs to Volkswagen’s Traton Group, has announced that it intends to equip all of its future electric vehicles with Northvolt batteries, giving the struggling manufacturer a boost. “We are now shifting over. For the future, all of our currently sold battery electric vehicles will come with Northvolt cells,” said Christian Levin, CEO of Scania.

“We are on our way out of our production hell. I think we have the toughest period behind us,” commented Northvolt CEO Peter Carlsson in an interview. The CEO declined to say when the production rate at Northvolt’s main plant in Skellefteå, near the Arctic Circle, will reach full capacity. The plant is currently operating at just five to ten per cent of its total capacity.

Volkswagen, Northvolt’s largest shareholder, has so far stated that it will support Northvolt in the expansion of battery cell production. However, Scania CEO Christian Levin declined to give details of any funding, but pointed out that Scania will continue to support Northvolt.

“It lies in our interest to make sure they can continue to deliver cells to us,” said Levin. “So we can continue to deliver vehicles to our customers where we have a customer contract.”

The situation surrounding Northvolt has come to a head since the summer. At that time, it became known that shareholder BMW had cancelled an order for battery cells worth billions – apparently because the Swedish company was behind schedule and BMW would no longer need the ordered prismatic cells at a later date.

At the beginning of October, it then became known that the subsidiary Northvolt Ett Expansion AB, which was responsible for the cancelled factory expansion, had filed for insolvency. This is said to have been the subsidiary in which production for Audi and BMW was bundled. “Audi, too, as confirmed by high-ranking Group and brand managers, has therefore initially withdrawn its order from Northvolt,” the article states.

bnnbloomberg.ca (financing), bnnbloomberg.ca (Scania)