Money is running out: the battery manufacturer Northvolt has stopped payments to joint venture partner Volvo. The board decided to finance its own battery operations in Sweden, Germany and Canada Northvolt announced on Wednesday that priority should be given. Meanwhile, Volvo Cars announced that it would acquire Northvolt’s JV shares in Novo Energy.
Northvolt did not meet its financing obligations, Volvo said on Wednesday. Volvo will therefore “exercise its buyback rights to acquire Northvolt’s shares in Novo Energy”.
The car manufacturer Volvo Cars, which is majority owned by the Chinese Geely, and Northvolt decided in 2021 to found the joint venture to build a gigafactory. The plant for the production of sustainable batteries for electric cars is to be built near Gothenburg for $2.8 billion. “Volvo Cars is assessing any potential impact these developments could have on Novo Energy and is exploring future scenarios to protect the investment,” the carmaker said. Any battery production at Novo Energy is dependent on the participation of third parties or other partners, it said.
Plans for battery factory in Heide
Northvolt, led by former Tesla manager Peter Carlsson, wants to produce the world’s most environmentally friendly batteries. But production problems are slowing the company down. Despite orders worth more than $50 billion, Northvolt is still in the red.
The company had stated that it was in discussions with investors and lenders to secure financing. There has been considerable progress. Among other things, Northvolt is planning to build a battery factory in Heide, Schleswig-Holstein. The federal government recently said that the company was sticking with it despite the financial problems.