Could Europe’s Biggest EV Battery Manufacturer Be Saved?

There are certain years that feel like decades, and for battery manufacturers, raw material suppliers and the entire supply chain, almost a decade’s worth of developments, evolution, controversy and collapse has taken place in the first half of this year.

In a year when EVs have reached critical mass, the biggest manufacturer of them in the world has seen sales collapse in a wave of questionable manufacturing, design, sales and marketing decisions, and as certain battery manufacturers have reached unprecedented heights, the biggest in Europe imploded.

The bankruptcy of Northvolt sent shockwaves throughout the industry, with experts, business leaders and industry pundits scrambling to work out what this meant for the green European future that the Swedish company promised. 

Was the bankruptcy the sign of a wider problem in the sector, or was it rooted in the specific issues Northvolt had?

A California-based startup has invested heavily in the belief that it is the latter, and that those problems can be fixed with more time.

Who Is Buying Northvolt?

The buyer was Lyten, a lithium-sulphur battery startup based in California, which had already begun to purchase Northvolt assets as early as the bankruptcy filing of their North American subsidiary in late November 2024.

Their aim is to purchase the rest of their assets, which include the Skelleftea sub-Arctic factory used for battery manufacture, the Research and Development headquarters in Vasteras and a planned gigafactory in Germany that was stymied by Northvolt’s financial woes.

These assets are added to their existing purchase of Northvolt’s California outpost Cuberg, their battery energy storage manufacturing plant in Poland, and their IP and product portfolios. Lyten has also revealed plans to rehire many workers and restart work on building a factory in Canada.

The price of the purchase has not been disclosed, but was said to be heavily discounted, and whilst the deal had been accepted by the bankruptcy trustee, motivated by getting the expensive facilities off of their books, they also noted that it needed approval from the relevant Swedish and German authorities.

This will give Lyten time to formulate its strategy and justify its motivations for buying a fallen giant.

Why Buy Northvolt?

The problems with Northvolt were significant, and whilst they were not helped by the shifting sands of the battery and energy storage industries, many of the problems were the result of issues specific to the company itself.

The defect rates for batteries were almost unprecedented for such a large battery manufacturer, not aided by initial issues with operating the factory floor machines they had bought, as well as general issues with humidity.

This led to constant component and product delays, forcing their biggest customers to acquire batteries from elsewhere during a time when capital was dwindling and costs had increased to try to fix the problems before the runway ran out.

All of this leads to questions as to why Lyten would bother buying the company, but they are investing on the pretence that these issues have either already been resolved or were close to being resolved before the trustee forced operations to be suspended.

If these issues can be fixed quickly and Northvolt’s crumbling empire quickly rebuilt and reinforced, it could turn Lyten from a major startup focused on developing cheaper, better batteries into a major global manufacturer.

Whilst the plans have remained nebulous, the intention is to rehire, work with previous customers such as Audi and Scania to try and rebuild bridges and focus on affordable, efficient energy storage using lithium-sulphur alongside the lithium-ion batteries developed by Northvolt.

Is The Energy Independence Dream Alive?

The biggest reason why Lyten bought Northvolt is less about its assets, IP or intrinsic value, and more about its mission to create an energy production industry independent of China and the United States, the two leading producers of EV batteries and EVs themselves.

As was seen during the energy crisis from 2021 to 2023, energy independence has become increasingly important to avoid potential vulnerabilities if trading between certain nations becomes disrupted for whatever reason.

Lyten has mentioned the importance of energy independence for national security reasons and believes that local sourcing and production are key to avoiding the potential weak links seen in the existing battery supply chain.

Because of the similar vision alignment, they have claimed that the purchase accelerates their goals by a matter of years, particularly if they can ramp up production in the way that they believe would make Northvolt profitable.

The approval for the sale is expected by the end of the year, pending due diligence requirements.