Finnish state takes control of Valmet and Ioncor

Finland shares a 1,300-kilometre border with Russia and feels particularly threatened by Putin’s war against Ukraine. The country has been preparing for potential scenarios for some time and wants domestic companies to play their part. For Valmet Automotive, this now results in partial nationalisation to make the supplier’s industrial expertise available to other sectors, including defence.

“In the changed geopolitical situation, Valmet Automotive’s special expertise in industrial serial production will strongly benefit the whole of Finland,” the supplier said in a statement.

The state and the Pontos Group have acquired 20.6 per cent of Valmet Automotive from CATL. At the same time, Finnish Industry Investment (Tesi) has transferred its existing stake directly to the state. As a result, the state will hold 79 per cent and Pontos 21 per cent of Valmet. Both parties also announced a capital injection of around 37.5 million euros.

Battery subsidiary Ioncor, spun out in 2024, is also affected. The state, pension insurer Varma and Pontos jointly acquired Valmet Automotive’s shares in Ioncor. Once complete, FMG will hold 70 per cent, Varma 16 per cent and Pontos 14 per cent. The state has committed to investing a further 20 million euros. Ioncor’s core business remains the assembly of battery systems.

The state’s entry into the Finnish supplier had been in preparation for months: According to its own statements, Valmet Automotive initially launched a strategic review in 2024 “to strengthen the independence of its business areas and expand its contract manufacturing business to new industries.” The downturn in the European automotive industry then continued, and the electrification of transport progressed more slowly than expected.

According to Valmet, this was the right moment for the strategic expansion that has now been completed: “In the future, the company will offer its decades-long, in-depth expertise in industrial serial production to a variety of industries, including contract manufacturing of defense supplies.”

“We are taking a completely new step in Valmet Automotive’s sixty-year history, as we are expanding the company’s business beyond car manufacturing,” said CEO Pasi Rannus. “Our expertise in industrial serial production, unique in Finnish conditions, creates a strong foundation for this expansion. This will add new pillars to our business and, on the other hand, create more domestic production capacity in Finland.”

Meanwhile, Ioncor is now set to become “an integral part of the Finnish battery value chain” and strengthen the investment portfolio of the state-owned Finnish Minerals Group (FMG) – “particularly downstream along the value chain in battery system R&D and production,” according to the statement. Roberts Abele will remain CEO of the battery company.

“FMG’s strategic objective is to develop a responsible battery value chain in Finland and to drive the creation of a new industry and expertise in the country,” Matti Hietanen, CEO of FMG. “Ioncor fits perfectly with our special mission and strategy, as battery engineering and battery system manufacturing are an essential addition to our portfolio downstream in the domestic battery value chain.”

Ioncor currently develops and assembles batteries for buses, trucks, commercial vehicles and passenger cars, employing around 1,000 staff in Finland (Salo and Uusikaupunki) and Germany (Kirchardt).

The partial nationalisation has immediate consequences for customers. Porsche will thus have to come up with something new for the planned battery supply chain for the upcoming 718 sports car. Not only is Northvolt, the previously designated cell supplier, insolvent, but the battery packs were also supposed to be assembled at the Valmet subsidiary, which had set up a production facility specifically for this purpose in Kirchardt, near Heilbronn, Germany.

However, last week, Automobilwoche reported, citing insiders, that Porsche had terminated its contract with Valmet. Although a connection with the partial nationalisation that has now become known has not been confirmed, it is likely. The Finns had opened the factory in Kirchardt in 2023 and were supposed to manufacture the battery packs for Porsche production in Stuttgart there. However, the market launch of the electric Cayman and electric Boxster has been delayed until 2027 at the earliest, instead of this year as planned. Currently, no other products are being manufactured in Kirchardt apart from a small series of plug-in hybrid batteries for Lamborghini.

Meanwhile, FMG is building a cathode materials plant in Kotka with Chinese partner Beijing Easpring. The investment amounts to around 800 million euros, with production scheduled to begin in 2027.

valmet-automotive.com, mineralsgroup.fi, ioncor-batteries.com

This article was first published by Cora Werwitzke for electrive’s German edition.