Northvolt discontinues production at its main plant in Sweden
Bankruptcy trustee Mikael Kubu says that although the search for a buyer for the production plant, known as Northvolt Ett, is progressing, it is currently not foreseeable that a buyer could take over production in the near future. For this reason, production will now gradually be scaled down and discontinued by the end of June.
According to the Swedish TV station SVT, some 900 people currently work at the factory – even though, at the end of March, Northvolt said that 1,200 of the 3,000 people in Skellefteå would keep their jobs. However, as the battery maker only had Scania left as a customer, the end of production was foreseeable. A Scania press spokesperson told SVT: “Unfortunately, this is no longer financially viable for Scania”. In other words, battery cells from the underutilised factory have become too expensive in the course of the insolvency proceedings.
The Scania spokesperson did not want to directly confirm rumours that Scania would purchase its battery cells from the Chinese battery giant CATL in the future, but said: “Today Northvolt and the bankruptcy trustee are announcing that they are discontinuing production. Then we shouldn’t be standing here talking about other suppliers.”
However, it was clear that there is no longer any battery production of this calibre in Europe, the Scania spokesperson continued. Scania’s parent company Volkswagen, which is also a major shareholder in Northvolt, is currently building its own cell factories in Salzgitter (Germany), Sagunto (Spain) and outside Europe in St. Thomas (Canada) under the name PowerCo.
The announced end of Northvolt’s battery production follows a series of bad news: the company has been struggling with quality problems since the start of production in Skellefteå at the end of 2022. There were still far too many production rejects by summer of 2024, which increased the cost and kept the production volume of cells ready for delivery far below plan. This ultimately led to Northvolt shareholder BMW cancelling an order worth billions.
A short time later, Northvolt had to divest its first subsidiaries due to empty accounts. However, the situation continued to deteriorate: in November 2024, Northvolt filed for Chapter 11 restructuring and CEO Peter Carlsson resigned. But that didn’t help much either, and in March the parent company Northvolt AB and several subsidiaries in Sweden filed for insolvency. This was followed at the end of March by the news that around 2,800 of the 4,500 employees in Sweden would lose their jobs – including at the main plant in Skellefteå.
It is still unclear what will happen to the Northvolt factory under construction in Heide in northern Germany. According to German TV station NDR, construction work is currently underway, but it is more about infrastructure measures or civil engineering work for the laying of power lines. Formally, the German Northvolt company is independent of Northvolt in Sweden and, according to a Northvolt Germany spokesperson, the processes in Sweden should have no impact on the planned site in Heide. However, it must be assumed that the project would only be viable with a new investor. As 600 million euros of taxpayers’ money has already been invested in the Northvolt project in Heide, the issue is also politically explosive. The German Federal Audit Office is now investigating the German aid for Northvolt – and a committee of inquiry may be convened in the state parliament of Schleswig-Holstein.
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