Northvolt has agreed to sell its industrial battery unit to Swedish truckmaker Scania, as Europe’s troubled battery maker steps up restructuring to shore up its finances.
The Swedish battery start-up said on Tuesday that it would sell its industrial battery business, based in Gdańsk, Poland, which supplies batteries to customers in mining, agriculture, and construction equipment manufacturing, for an undisclosed sum.
The sale follows Northvolt’s Chapter 11 filing in November. Europe’s biggest battery start-up faced severe production delays at its factory in the sub-Arctic town of Skellefteå, which left the group scrambling to find up to $1.2bn to exit bankruptcy. Its co-founder Peter Carlsson resigned as chief executive a day after its collapse.
“The transaction is one more important milestone reached on our path to focus the company,” said Matthias Arleth, Northvolt’s chief operating officer.
The world’s EV battery market is dominated by Asian groups led by CATL and BYD, which control about 70 per cent of the global market. In its push to reduce reliance on Asia for green technologies, Brussels had hoped to establish a battery supply chain across Europe, with Northvolt at the heart of its ambitions.
Before its spectacular downfall last year, Northvolt had gathered more than $50bn in orders from automotive groups such as Volkswagen, which owns Scania, Porsche and BMW but failed to increase production quickly enough.
The company — in which German carmaker Volkswagen owns about a one-fifth stake — has since scaled back its expansion plans and is aiming to raise fresh capital from strategic and financial investors.
Late last month, Northvolt reached a deal handing its joint venture partner Volvo Cars full ownership of Novo Energy to build a battery factory in Gothenburg. The two businesses also signed a framework agreement to “explore how they could work together in the future, including potential future supply opportunities in North America”.
Northvolt also sold its remaining stake in battery recycler Hydrovolt to Norsk Hydro as it plans to complete its restructuring by the end of March.
Neither Northvolt nor Scania disclosed the size of the deal but the Swedish daily Svenska Dagbladet wrote that Northvolt would be paid less than SKr100mn (€8.9mn) — significantly lower than the SKr1.6bn (€143mn) that Northvolt in 2021 said it would invest in building the Gdansk plant.
The deal strengthened ties between the two companies. Scania has been one of Northvolt’s biggest customers as well as financial backers, and last year injected an additional $100mn into the struggling battery maker following its Chapter 11 filing.
The sale of the unit, which employs about 300 people including workers at a battery prototyping facility in Stockholm, is subject to approval by Swedish regulators.