Some (as always, strictly personal) thoughts regarding Northvolt’s recently announced Chapter 11 filing. Amongst all the confident hot takes out there speculating what went wrong I think it’s worth taking a brief step back.
While at UU I, and others in the group, had the opportunity to visit Northvolt in 2017 when they were still around 60 employees. A key part of their thesis was that their plan to make ‘good enough’ (my words) NMC batteries would suffice because it was understood there would be plenty of demand - a refreshing perspective at a time when the field was obsessed with next-generation chemistries. They brought with them a lot of experience from Tesla and Asian battery manufacturers and a strong rationale for building the factory in Skellefteå. I bought it - and I don’t remember anyone disagreeing that it was exactly the sort of initiative the EU needed to move away from complete dependence on Asian suppliers, as evidenced by the amount of investment they attracted.
If you look at projections of battery demand and production from that time, you’d see projections of global battery demand around 200 GWh by now. 7 years later, the reality is closer to 1 TWh, with global production being almost 3 times that, dominated by China. To add to that, practically nobody outside of China foresaw the emergence of cell-to-pack and re-emergence of LFP in 2020 which has thrown the future and wisdom of NMC chemistry into doubt in recent years. Everybody knew about the competition from China, and still Chinese companies took everyone by surprise. Batteries are hard, but not impossibly complicated, the likes of CATL, BYD etc are proving that. What is perhaps harder is replicating a relatively mature industry when the incumbents are still well on the front foot.
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