TheChek News Flow

Collapse of vehicle battery maker deals major blow to Europe’s bid to rival China

Battery maker Northvolt has filed for bankruptcy in Sweden, capping the downfall of a company once regarded as Europe’s best hope of competing in an industry dominated by China.

The Swedish start-up, which has backers including Volkswagen, Goldman Sachs and BlackRock, said on Wednesday that it had been unable to secure financing to continue and that a court-appointed trustee would sell its assets.

“This is an incredibly difficult day 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,” said Tom Johnstone, Northvolt’s interim chair.

It is an ignominious end for a company that attracted some $15bn of corporate and government investment to develop technology for electric vehicles where Europe is playing catch-up to Asian countries such as China, Japan and South Korea.

Northvolt filed for Chapter 11 bankruptcy in the US in November but had spent recent months in talks with about 100 potential investors about putting in $1bn to secure the future of its sole existing battery factory in Skellefteå, just below the Arctic Circle.

A Financial Times investigation previously found that the group — led by two former Tesla managers — had tried to open as many as six factories at the same time. Ten current and former employees said there were problems with poor management, safety standards, and an over-reliance on Chinese machinery.

After it was founded in 2016, Northvolt quickly became Europe’s best-funded start-up, winning attention from top government officials in Germany, Canada, Sweden and Brussels.

But the Swedish government, unlike those in Canada and Germany, declined to offer major subsidies to the group and last year, investors backed out of a financing round at the last minute. Its planned Canadian and German factories are not part of the bankruptcy.

Johnstone said that despite increased production at its factory in recent months and cost cuts it had been unable to secure financing. “We are hopeful that the outreach we have undertaken with potential investors during the Chapter 11 process will accelerate identifying the necessary financing to allow continued trading under the Swedish bankruptcy process,” he added.

Swedish truckmaker Scania, Northvolt’s main customer, provided the company with fresh capital in November and bought its industrial battery systems business. It has said it recently secured supplies from other battery makers.

Chinese battery makers already have a strong presence in Europe. CATL, the world’s largest manufacturer, is building plants in Germany, Hungary and Spain, the latter a joint venture with carmaker Stellantis. VW has partnered with another Chinese company Gotion.

There are other European companies developing EV batteries but they are at an earlier stage than Northvolt. There have also been other failures, including Norwegian group Freyr which abandoned its battery plans to become a solar power company instead.

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Plan to replace Scottish oil refinery mulls £13bn investment

Scoping study outlines nine project options for a future industrial complex at Grangemouth

A plan mapping out a green future for Scotland’s imperilled Grangemouth oil refinery proposes £3.8bn of investments over a decade, rising to almost £13bn under a best-case scenario.

A feasibility study of potential options for the site — known as Project Willow — said nine industrial opportunities from recycling to biofuels could be deployed over the next 20 years to create a “flourishing low-carbon hub,” according to documents seen by the FT.

But the proposals lay bare the scale of investment and regulatory work needed for Grangemouth, raising questions over the UK and Scottish governments’ ability to deliver on this litmus test of the energy transition.

Project Willow, undertaken by EY, has been carried out by both governments and Petroineos, a joint venture between Sir Jim Ratcliffe’s Ineos and PetroChina. An outline of its recommendations is expected to be published in the coming days.

Last September, Petroineos confirmed it would close the oil refinery at the heart of the complex near Falkirk in the second quarter of this year, causing 400 job losses and fears of wider economic damage through central Scotland.

Implementation of the proposed projects will now pose a challenge for the UK and Scottish governments, which have pledged to save jobs and develop clean industries while reaching net zero greenhouse gas emissions.

“The key point is that all of this potential can only be unlocked by policy and regulatory changes,” said one person briefed on the report. “There also needs to be a custodian to manage the due diligence and financing of a broader master plan.”

News channel STV reported last month that Willow could create 400 jobs in the next five years, rising to 1,750 by 2040.

The UK and Scottish governments have pledged £200mn and £25mn, respectively, for viable developments. UK prime minister Sir Keir Starmer hopes the funding will attract three times as much private sector investment.

Industry insiders, however, fear bureaucratic inertia could put off private enterprise. “We are worried this will all just disappear into the civil service,” said one of them. “Officials have already said the whole thing is too difficult.”

Government would need to shape a favourable investment climate by funding mechanisms for costlier clean fuel while fostering forestry and crop feedstock supply chains, the person added.

“These projects would already have been happening if they were commercial today,” the person said.

Petroineos declined to comment. The UK government said the prime minister’s £200mn “transformational” commitment to Grangemouth sought to “unlock its potential.”

The Scottish government called on UK ministers to enable new technologies to be “deployed at pace”, saying most of Willow’s recommendations would be directed at Westminster.

From 2028, Willow’s near-term projects focus on recycling plastics, the production of biomethane from sewage and animal waste and, from 2030, turning paper waste into feedstocks for low-carbon chemicals.

Longer-term proposals, from 2032, would require larger capital spending and significant regulatory overhaul.

One is an £800mn sustainable aviation fuel and renewable diesel refinery using waste fats and crops to tap airlines’ growing demand for lower-carbon fuels. But with only a quarter of the feedstock available locally, scaling crop yields would be vital, the documents said.

Another, costing £340mn, would process Scottish timber into advanced bioethanol, a greener alternative to petrol. But some question using trees as a fuel feedstock when the UK already imports 80 per cent of its timber.

Building eight of the projects would require £3.8bn, with the report’s “growth case” visualising another £3.45bn for additional capacity and the construction of an e-ammonia plant.

Overall, £12.9bn would bring all nine developments to their “full potential,” including the use of Scotland’s plentiful wind power to generate green hydrogen.

“Even if only three or four projects make it through, it would be transformational for Grangemouth,” said the industry insider.