The Northvolt project seemed full of promise when it launched in 2015. The goal was clear. Open a series of six battery manufacturing plants in Europe and North America, with the first one in Finland. However, the company appears to be having liquidity problems. If the Northvolt crisis ends European battery dreams for now, will anybody else be brave enough to give it a try?
Energy Independence in the New World Order
When the oldest of us were kids, the world went through two oil crises that reshaped the world order. The current state of play internationally has made us aware of how much we rely on batteries. Control over battery raw materials has become a new national priority.
Reuters advises that Northvolt’s ‘financial collapse’ is ‘a blow to Europe’s plan to set up its own battery industry to power electric cars’. This was after ‘Europe’s biggest hope’ filed for United States Chapter 11 Bankruptcy Protection on Thursday, November 21, 2024.
Chapter 11 protection generally allows a debtor to propose a plan of reorganization to keep its business alive. Wikipedia advises that the company had ‘run out of cash’. But that Northvolt had secured $100 million in financing, and would operate normally throughout the Chapter 11 procedure.
What If Northvolt Crisis Ends European Battery Independence?
If the Northvolt crisis ends European battery hopes of energy independence, then the Union may have to rely on United States or China for future support. This may lead to a chain reaction among the European start-ups that Northvolt previously seeded, to encourage electric vehicle adoption.
These developments come at a time of two contra-flows according to Reuters. On the one hand, there is a slow-down in electric vehicle demand. While on the other, ‘China has taken a huge lead in powering EVs, controlling 85% of global battery cell production’.
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