Morrow Batteries filed for bankruptcy recently. Sadly, it was all too predictable, almost as predictable as the online handwringing lamenting Europe’s lack of competitiveness in batteries which now familiarly accompanies similar news. There’s plenty of diagnosis about what went wrong elsewhere, which I won’t try to cover here.
What I’m not seeing however is consideration of the idea that the problem isn’t so much that European companies are failing, but that they fail without the lessons learned from those failures accumulating into something stronger.
I’m not sure Morrow learned sufficiently from Northvolt. Certainly they learned some lessons: when they scaled back in January 2025, they were clearly positioning themselves as the anti-Northvolt, denouncing “aggressive scaling”. But at the same time, they bemoaned the loss of four months and 100m NOK to waiting for work permits for technical experts from suppliers, recognisably one of the same problems that afflicted Northvolt. Morrow had an answer to at least some of the strategic challenges but not the structural ones.
Many people naturally look to China and the dominance of their big players for inspiration (or dread). But how many of those who do so are aware of the carnage China’s battery sector went through over the last decade and a bit? Dozens of manufacturers made the wrong bets and lost, supported by local governments burning through tens of billions of euros in capital. But the failures, and learnings from those failures, accumulated gradually into suppliers, local clusters, consolidating into some of the giants that dominate today.
But where is that mechanism in Europe? In Northvolt’s case, some small parts were retained more or less intact - NOVO Energy’s R&D unit became part of Volvo Group, Northvolt Battery Systems became Scania Industrial Batteries. But Lyten’s acquisition of the rest of it took so long, not much more than a small proportion of key people were retained - many people were scattered to different countries, different industries. Lyten may have acquired the physical assets and the IP, but a lot of what Northvolt had learned embodied in its people has to a significant extent evaporated. It remains to be seen what success Lyten will have.
Morrow’s January 2025 announcement also included the quietly damning statement that “Investors and customers expect to see large-scale production before investing or signing new contracts”. With this sort of chicken-and-egg problem, a pure startup cell manufacturer probably can never succeed. The next manufacturer to finally make it will more likely be a JV with a deeply committed anchor customer (or OEM captive, like PowerCo) or a subsidiary of an Asian incumbent, where the most important accumulated knowledge remains inside tall corporate walls or stays offshore altogether.
Which raises the awkward question as to where the learning we still haven’t compounded actually lives in either of those scenarios.
Perhaps the worst outcome of any such bankruptcy (Northvolt, Morrow, etc) is that it becomes seen as a reset. The uncomfortable possibility exists that even the eventual survivors won’t compound what they learn either: not out of bad faith, but just that the current structure isn’t asking them to.