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Northvolt, Europe’s big hope in battery manufacturing, is considering cutting back its aggressive expansion plans after a series of problems with its first gigafactory in Sweden pushed it to launch a strategic review.
Peter Carlsson, Northvolt’s chief executive, told the Financial Times that the board of the Swedish industrial start-up would meet in September and hinted that new factories in Germany, Canada and Sweden could be delayed.
Northvolt recently lost a $2bn contract from BMW, which is also an investor in the battery maker, with the German car group instead handing the order to an Asian supplier, Samsung SDI.
The Swedish group has struggled to produce at scale at its first factory in Skellefteå, just below the Arctic Circle.
“We need to prove that we can match [Asian suppliers] in execution. That’s why we are also doing a strategic overview of our business plan and our growth plan so that the core engine of Skellefteå is getting up and running before we take the next steps of moving along,” Carlsson said.
Northvolt has raised €15bn in debt and equity — the most of any start-up in Europe — but has failed to ramp up production at its first gigafactory even as it has planned to build three more.
The Skellefteå plant has a production capacity of 16 gigawatt hours — 1GWh would be enough batteries to power about 17,000 cars — but Northvolt only manufactured a tiny fraction of that last year.
Carlsson declined to comment on the exact output levels but said Northvolt would produce about 1GWh this year if it managed to quintuple production from current levels by the end of the year. He added that it should produce “a handful” of GWh in 2025, and aimed to reach profitability in 2026.
The lossmaking company was forced to stop production last year after the deaths of two workers in separate accidents at the Skellefteå plant. It is also facing a police investigation after three workers from different departments all died at home this year. The company has found no connection between their deaths and their work.
The Swedish group, whose main shareholders include Volkswagen, Goldman Sachs Asset Management, as well as BMW, is set to lose its chair, former SAP chief executive Jim Hagemann Snabe after he suffered a serious injury. Tom Johnstone, the former chief executive of bearings maker SKF, is serving as interim chair.
Carlsson said on the recent problems: “We’ve been a media darling. We’ve been in a downturn a couple of times. It’s never fun when you have headwind. But to some extent, it makes you even more determined and focused.”
He added that Northvolt was “spending a lot on all our different construction sites” and that this would form part of the strategic review.
He declined to comment on the specifics of the review, adding: “It is super important to get the entire company rallying around every type of support that is needed and to do a little bit better in the scale-up of Skellefteå.”
Carlsson insisted that he was “very confident in our ability to succeed”. He added: “Product-wise, we can really compete and we can beat them on product performance.” Where Northvolt needed to improve was in execution, he stressed.
Northvolt also released its annual results on Tuesday, showing that its net loss deepened to $1.2bn in 2023 from $285mn in 2022. Its revenue increased slightly to $128mn last year from $107mn. It has warned it will face large losses while it invests heavily and fails to produce at scale.
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