What can Northfolt’s failure to the competitive future of Europe?

There is still hope that the buyer will revive Swedish Swedish town’s wealth It depends on the success of Northfolt. Start starting Silicon Valley Lyten A roof over the Polish plant in NorthfoltSwedish truck manufacturer He expressed his interest In assembly of a consortium to acquire the research and development facility.

However, there is one certain thing: the European Union nor Sweden Northfolt will not save, although it was one day the best emerging in Europe, where it received $ 15 billion in financing obligations from investors and governments.

How the company, which was founded by two former executives in Tesla, although this huge amount of capital will be a case study for business colleges for years to come. It also raises questions about whether the government has done enough to support the former battery hero, and how Europe should review its approach to competing with China in high -growth and carbon industries.

What is wrong?

While Canada and Germany both provided great support and great grants to the Swedish company, its mother country is largely abstaining, in a concept way Cash Of the shareholders and former executives. After all, the dominant Chinese industry has benefited from a long time from government aid, which helped it reach maturity to reduce the costs of the unit to 30 % lower From the batteries made in Europe.

However, it is unclear whether more financial support has caused a decisive difference, since Northvolt was already well full. According to Climate Tech Venture Capital World FundNorthVOLT problems were more related to the difficulty of playing caught with China, and the mistakes it made along the way.

“If you want to increase the ability to produce new production in a commodity market, your executions should be amazing; it was not Northfolt,” says Douglas. “They continued to expand and expand geographically before they have a good handle for their actual production. They did not raise the return numbers and their delivery times were delayed, so it cannot be able to compete.”

As a result, car customers began to lose confidence. BMW I handed over a big blow Request a request of $ 2.15 billion Amid delay. Scania was insurance Alternative offer For its electric fleet where Northvolt has struggled to increase production.

until VolkswagenThat holds a 21 % stake in Northfolt, eventually lost faith and A large screen has taken its investments In 2024, he moved forward with his subsidiary. PowercoA step confirming the continuous demand for local batteries.

When it stepped as an executive president after the company applied for the bankruptcy of Chapter 11 in the United States, the North Veter Carlsson founder said it though Take responsibility The fact that it has ended in this situation.

The moment of making or breaking the EV sector in Europe

Northvolt’s failure is undoubtedly a blow to the wider ecosystem. For Douglas, “many of the largest investors will make future evaluation processes, and stakeholders will be more focused on the risk of evaluation manufacturing more than before.”

However, it is important to remember that Northvolt was not the only expansion in the race. “Not because some have struggled, like Northfolt, it’s the end of the game. Europe needs to continue paying.” Recently said. Startup, ConfinedSupported by RenaultAnd secure $ 2.15 billion for Building EV GigaFactory in Dunkirk.

Once it was presented as French Northvolt, Verkor moved more slowly than its previous counterpart. Although his experimental plan in Grenoble is the manufacture of cells-the basic units that store energy in a battery-complete production in Dunkirk It has not started yet.

This means that Verkor is still in a critical transitional stage, but a little help can now be relied upon from Brussels.

The European Commission recently announced that it will distribute about one billion dollars in grants To six EV battery projectsAs it seeks to settle the stadium stadium and support the move of Europe to a clean, competitive and flexible industrial base. These include Verkor, but also Novo Energy, a previous joint venture between Northvolt and Volvo cars, which which is newly R.OK is complete ownership; Cellforce, owned Porsche; And ACC, supported by Stelantis and Mercedes -Benz.

Andreas Fisher, the founding partner at Deep Tech Vc FIRM, says The first capital. For him, this investment will require greatly in the entire European EV industry, and do not try to choose a “profit” company.

Protection, specialization and long -term

It is a view shared by the International Energy Agency (IEA), which says that we are in the moment of “making or breaking” the manufacture of European batteries. Although China-which has large-scale manufacturing definitions and the completion of the supply chain-now produces three quarters of batteries worldwide, there are paths to build a more competitive battery industry in Europe, exceeding the abdominal support.

“All begin to ensure strong domestic demand, which gives manufacturers time to refine production processes and develop strong regional industrial ecosystems. This clear policy indicates the continued growth of demand and reduces investment risks”, “IEA”. books Earlier this year.

Fischer adds that policy support for the European batteries industry will also need to involve regulations or resort to protectionist policies, such as Carbon border modification mechanismThe European Union system to confirm that the price was paid against the carbon emitted during the production of some imported goods, which will be fully applied from 2026.

“Things like CBAM or local content requirements can help create a playing field at a level with a clearer addition to being locally”-but he still believes it will be difficult for Europe to compete in the main types of lithium-ion batteries currently used in electric compounds: LFP (legeium iron phosphate). DeclineEspecially in China; And NMC (Mangnies Cobalit Nickels), where Korea and Japan have evolved Strong experience.

Instead, Douglas believes that Europe is a better opportunity for high -end cells and new cell chemistry. It also refers to other relevant industries where the price gap with China is either less, or less important: “Carbon industrial manufacturing, recycling and trading, biotechnology, agricultural technology, and energy business models are all great beginnings in Europe.”

However, the collapse of exposed palaces in Northvolt that must be addressed if Europe wants to build supply chains that are decisive to its sovereignty, in EV batteries and outside.

One of these, according to Dr. Herbert Mangio, a general partner at Deep Tech Vc in the early stage VsquaredIt is that the ecosystems of Western VC should better estimate how difficult it is to build viable production systems economically on the scale and development of China. “It is important to have the right risk management and control engraved in governance structures, that is, the ability to judge progress for budgets,” warns.

At the level of the system, the cheap energy and the skilled workforce are also a “basic line” necessary for competitiveness, as a mangio adds. It can take time to achieve this time, but this in itself is a lesson from how the Chinese build their prosperous industries. “China shows the consistency of industry policies that allow reliable and competitive environmental systems, especially in the clean technology sectors,” says Mansesu.