NorthVolt sells industrial division for $6m, files for bankruptcy
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After raising over $15bn in funding over the last decade, European battery startup Northvolt is filing for bankruptcy in Sweden and selling its industrial division for just $6m.
The Chapter 11 bankruptcy hearings in the US this week saw a consortium of buyers offering $6m for the Industrial and Energy Storage System business, with $11.6m for the assumed liabilities and $14.6m to avoid additional costs.
At the same time the parent company Northvolt AB filed for bankruptcy in Sweden, as well as Northvolt Ett AB, Northvolt Labs AB, Northvolt Revolt AB and Northvolt Systems AB.
The main shareholders in NorthVolt are German car maker Volkswagen with 31% and US bank Goldman Sachs through its West Street Capital Partners VII Investments Offshore II fund in Luxembourg with 15.18%. BMW Spain owned 8.75% while Vattenfall in Sweden had 5.88% and ABB Technology Ventures in Switzerland had 4.04%.
The $6m valuation for the industrial business does not bode well for the bankruptcy process at the parent company. However the firesale will provide a new company with production battery technology for electric vehicles and several battery gigafactories in various states of development.
“We are hopeful that the foundation we built — the technology, the expertise, and the commitment to sustainability — will continue to drive change in the industry,” said Tom Johnstone, interim chair at Northvolt.
“This is an incredibly difficult time for everyone at Northvolt. We set out to build something groundbreaking — to drive real change in the battery, EV and wider European industry and accelerate the transition to a green and sustainable future,” he said. “The outcome is especially hard considering not only the level of engagement and interest we held with potential partners and investors in recent months, but also the clear improvement and upwards trajectory that we have been seeing in Northvolt’s production in Skellefteå, where cell output from serial production lines has doubled and we have secured a 50% improvement in production yield since September.”
The company had been selling off parts of the business to try to stay afloat. “Through the recent months, Northvolt has refocused its operations and reached several achievements. We ramped up production to meet customers’ needs, reduced operational cash outflow by 55%, made tough decisions to pause or delay expansion plans, completed divestitures and ultimately delivered our first one million battery cells to a European customer,” said Johnstone.
“Northvolt has come a long way, and we are beginning to see the real outcomes of our work, including production line improvements that helped customers bring more electric vehicles to the market more quickly. For me personally, it remains key for Europe to have a homegrown battery industry, but it is a marathon to build such an industry. It needs patience and long-term commitment from all stakeholders,” he said.
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The Chapter 11 process saw a consortium of businesses buy the Northvolt Systems Industrial division. This develops and manufactures battery systems for the heavy industry and off-highway market segments and employs approximately 300 people in a battery systems prototyping facility located in Stockholm, Sweden, and Northvolt’s production facility in Gdańsk, Poland.
It has supplied customers such as Epiroc, Konecranes, and Dynell for material handling systems, construction equipment, mining and agricultural vehicles. Following the acquisition, Northvolt Systems Industrial operations will continue, and orders contracted for the year 2025 will be executed as planned.
“We are pleased to have arrived at this agreement which aims towards securing a bright future for the people, technology and products of Northvolt Systems Industrial,” said Elin Åkerström, Vice President Northvolt Systems Industrial.
“In a short time, we have built a team of experienced experts who have developed prototypes from the ground up and integrated an advanced portfolio of industry-leading products into serial production. We have sold over 3,300 of our Voltpack Core products and achieved approximately 10 million hours of runtime for individual battery packs. I’m excited to see the continued growth and development of Systems Industrial as a result of this acquisition,” she said.
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