The Electric: Northvolt’s Setback Points to a Broader Threat to EV and Battery Startups

After two Tesla veterans launched Northvolt in 2017, the Swedish battery developer rapidly became Europe’s most prominent champion in the race to develop local electric vehicle and battery industries. Though it had never made a battery, the company announced a whirlwind of plans for vertical integration—plants across Europe and in Canada that would process lithium, make electrodes, manufacture batteries and recycle them when they were spent.

Northvolt would make next-generation electric aviation batteries in the U.S. and next-gen sodium-ion batteries in Europe. Money was not a problem: Northvolt raised more than $13 billion in debt and venture funding, and chalked up $55 billion in EV battery orders from BMW, Volvo, Volkswagen and truck maker Scania. The EU lavished almost $1 billion in subsidies on the company.