Volvo acquires battery joint venture Novo Energy

Volvo Cars and Northvolt have signed a share purchase agreement for Northvolt's shares in the jointly operated battery cell joint venture Novo Energy, which will result in Volvo Cars taking full ownership of the joint venture, subject to approval by the relevant authorities.

Image: Northvolt

Volvo Cars and Northvolt have also signed a framework agreement to explore how the companies could work together in the future, including potential future supply opportunities in North America. However, details of this framework agreement are not provided in the brief announcements from the two companies.

Volvo Cars announced its intention to acquire a majority stake in Novo Energy in October 2024 – so before Northvolt filed for Chapter 11 bankruptcy protection under the US bankruptcy code. The joint venture agreement between the two companies includes a buyback right in the event that one of the parties breaches the shareholders’ agreement- which is what Volvo claims has happened, as Northvolt allegedly “has not fulfilled its financing obligations.”

Due to several problems – from enormous delays in the production ramp-up at its first battery factory in Sweden to failed financing – Northvolt had run into financial difficulties and, as the Volvo announcement at the time suggests, was unable to make all agreed payments even before the creditor protection proceedings.

Volvo has now announced that the transaction “is subject to clearance from the United States Bankruptcy Court for the Southern District of Texas and the Inspectorate of Strategic Products in Sweden, with both parties responsible for fulfilling agreed prerequisites.” According to Volvo, there will be no outstanding claims between the companies once the transaction is finalised.

Despite the purchase agreement that has now been agreed, it remains to be seen exactly what will happen with Novo Energy. The joint venture was founded in 2022 to jointly produce battery cells for electric cars from Volvo (and potentially other Geely brands). In September 2023, work began on the cell factory in Gothenburg, which was designed for a capacity of up to 50 GWh.

However, Volvo already announced in October that it would not be manufacturing battery cells on its own, only with a partner. Although the first step has been taken with the complete takeover, the important technology partner for cell production has not yet been presented. Novo Energy had planned to start production in 2026. It is unclear whether Volvo will be able to keep to this schedule with such a late change of partner.

volvocars.com, northvolt.com

1 Comment

about „Volvo acquires battery joint venture Novo Energy“
Tom
01.02.2025 um 17:14
Will likely be CATL

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