CATL denies rumours regarding Northvolt investment

On Friday afternoon, the Swedish newspaper Dagens Nyheter reported that Northvolt was in talks with Chinese battery manufacturers, “including CATL.” The negotiations with CATL are said to have been ongoing since the summer, when representatives met at CATL’s headquarters in Ningde. However, there was no source for this in the article.

In fact, such talks in the summer could have been about many things – a technical partnership, a deal for raw materials, procurement, a technology transfer in the style of a licence model or even a direct investment by CATL in the European battery manufacturer. Following the start of the Chapter 11 proceedings, the news of the talks naturally offered plenty of room for interpretation – which is why there was even talk of a possible rescue for Northvolt. This would have been somewhat ironic, as Northvolt was founded precisely with the aim of forming a European answer to the powerful battery manufacturers from Asia.

These talks did indeed take place, as CATL co-founder Pan Jian has now revealed in an interview with the German publication Frankfurter Allgemeine Zeitung. He confirmed that they had been “in dialogue over the past six months.” “There were talks about whether we could help Northvolt with production and technology. It was about a licence model, like the one we have with Ford,” the CATL co-founder is quoted as saying.

However, a financial investment, which would be extremely important for the struggling Northvolt in the current situation (as CATL would certainly secure its investment with appropriate support for technology and production), is unlikely. When asked specifically about this, Pan Jian replied: “It’s even more complicated than a licence partnership. There’s a lot to think about.” And when asked again whether he would not rule out such a step, he said: “It is not our priority. We are open to helping European companies that need our help.”

The fact that the original negotiations on a licence model did not come to a successful conclusion was probably due to the extremely tight financial situation at Northvolt – at least from CATL’s point of view. “We didn’t realise that they were already in such a difficult financial situation. If Northvolt had contacted us a year or two earlier, it would have been easier because they were still financially stable,” says Pan Jian. “But there is still the possibility that we can help them with production.”

The problems at Northvolt became clear in the summer. At the time, shareholder BMW had cancelled an order worth billions because Northvolt was behind schedule – the order was for prismatic cells of the type used by BMW in its current electric vehicle models and manufactured by Northvolt at its Northvolt Ett factory in northern Sweden. Battery cells have been produced there since the end of 2021, but the ramp-up of production is slow and far behind schedule. As BMW is switching to round cells for its upcoming e-cars based on the New Class, the prismatic cells will no longer be needed at a later date.

The combination of cancelled orders and the capital-intensive problems in ramping up production has put the company in a difficult financial situation. As a result, the company initiated a strategic review, announced cost-cutting measures and reorganised the Management Board. However, this was not enough, and in November Northvolt filed for Chapter 11 creditor protection proceedings in the USA, with CEO Peter Carlsson resigning on the same day.

dn.se (in Swedish, Paywall) via bnnbloomberg.ca, faz.net (in German, Paywall)