Northvolt: "Tried to do too much at the same time"

Northvolt has invested in several new factories at the same time. It may have become too much to handle, according to Hampus Engellau, automotive analyst at Handelsbanken. I think they wanted to kill three birds with one stone, he says.

» Updated: September 24 2024

» Published: September 23 2024

Northvolt: "Tried to do too much at the same time"
Photo: Björn Larsson Rosvall/TT

There is currently an overcapacity in the battery market, according to Hampus Engellau. But for battery manufacturer Northvolt, the parallel factory constructions can also have created problems.

The factors have probably interacted. But for Northvolt, it's probably more about planning to build capacity and investing in new factories in several different locations at the same time, he says.

It has become too much to handle.

Tougher competition

Besides Northvolt's first so-called gigafactory in Skellefteå, the company is building a battery factory together with Volvo Cars in Torslanda, Gothenburg. There is also activity or planned activity at several other locations, both in Sweden and abroad.

Several factors – including tougher emission regulations – are driving the development.

For the time being, electric car sales have weakened in Europe, and several major customers – such as Volkswagen and BMW – have encountered tougher competition in China, notes Engellau.

When they have generally weaker demand, car manufacturers have started to waver and have difficulty seeing how it will look like in the coming years, he says.

Lack of skills?

At the same time, he continues, the slowdown in the market is probably only temporary. This makes it difficult to scale up in the future.

It's a difficult situation generally for car manufacturers and also for Northvolt. This is competent personnel being laid off, while knowing that when demand takes off again, it will be difficult to find competent personnel, says Engellau.

Magnus Henrekson, professor of economics at the Research Institute of Industrial Economics, believes that the public should get answers on how Northvolt will continue to be financed.

They have no revenue, so it must be financed by credits. Does it mean that the banks have given them a reprieve so that they can continue to loan-finance their salary costs?, says Henrekson, and continues:

The local community needs to get answers on how much credit has been granted and how much time they have.

The future of Northvolt stands and falls with whether the banks are willing to keep the business alive in the hope that it will be able to take off, he says further.

Production is almost negligible compared to what it should be, just a few percent, so it's incredibly far away.

Tags

TTT
By TTThis article has been altered and translated by Sweden Herald

More news

Weekend Push for New Industrial
2 MIN READ

Weekend Push for New Industrial Agreement as Deadline Looms

Swedes Opt for Europe as
3 MIN READ

Swedes Opt for Europe as US Travel Bookings Drop 30 Percent

Energy Efficiency Boosts Villa Prices
1 MIN READ

Energy Efficiency Boosts Villa Prices in Sweden's Real Estate Market

Elon Musk's XAI Acquires Platform
1 MIN READ

Elon Musk's XAI Acquires Platform X in Major Tech Move

Inflation Concerns Drag Down Wall
1 MIN READ

Inflation Concerns Drag Down Wall Street Indices

Sweden Seeks New Investors for
1 MIN READ

Sweden Seeks New Investors for Bankrupt Northvolt Battery Firm

US Inflation Surprises with Higher
1 MIN READ

US Inflation Surprises with Higher Than Expected February Rate

Li Ka-Shing Halts Sale of
1 MIN READ

Li Ka-Shing Halts Sale of Panama Canal Ports Amid Beijing Pressure

Princess Madeleine Addresses Criticism Over
2 MIN READ

Princess Madeleine Addresses Criticism Over New Skincare Venture

Stockholm Stocks Slide 4.5 Percent
1 MIN READ

Stockholm Stocks Slide 4.5 Percent in a Week as US Inflation Hits

French Inflation Dips Below Expectations,
1 MIN READ

French Inflation Dips Below Expectations, Impacting ECB Decisions

Cautious Consumer Spending Sees Slight
1 MIN READ

Cautious Consumer Spending Sees Slight Uptick in Sweden's Retail Sales

SSAB Faces Financial Supervisory Authority
1 MIN READ

SSAB Faces Financial Supervisory Authority Probe Over Reporting Rules

79,000 Swedes Face Student Debt
1 MIN READ

79,000 Swedes Face Student Debt with Enforcement Authority in 2024

Royal Expert Questions Princess Madeleine's
3 MIN READ

Royal Expert Questions Princess Madeleine's Skincare Venture

Gold Prices Reach New Heights
1 MIN READ

Gold Prices Reach New Heights as Trade Tariff Concerns Grow

Asian Markets Tumble as Investors
1 MIN READ

Asian Markets Tumble as Investors Brace for New US Tariffs

Ubisoft and Tencent Invest $1.25
1 MIN READ

Ubisoft and Tencent Invest $1.25 Billion in New Gaming Subsidiary

Sweden to Build Major Carbon
2 MIN READ

Sweden to Build Major Carbon Capture Facility in Stockholm by 2028

Wall Street Dips as US
2 MIN READ

Wall Street Dips as US Car Giants Slide on New Tariff Announcement

Vattenfall Prepares Autumn Application as
2 MIN READ

Vattenfall Prepares Autumn Application as Sweden Backs Nuclear Expansion

US Car Tariffs Threaten Swedish
2 MIN READ

US Car Tariffs Threaten Swedish Auto Industry, Warns Dousa

Nordic Nations Unite to Tackle
1 MIN READ

Nordic Nations Unite to Tackle Unsafe Products from Temu and Shein

Volvo Recalls 73,000 Hybrids Over
1 MIN READ

Volvo Recalls 73,000 Hybrids Over Fire Risk in Battery Charging

Four Charged in Nasdaq Stockholm
2 MIN READ

Four Charged in Nasdaq Stockholm Insider Trading Scandal

European Car Stocks Drop After
1 MIN READ

European Car Stocks Drop After US Tariff Announcement

Trump Warns EU and Canada
1 MIN READ

Trump Warns EU and Canada of Higher Tariffs Over Economic Moves

Sweden's FI Pushes for Clearer
1 MIN READ

Sweden's FI Pushes for Clearer Mortgage Rate Discount Notices

Trump's Trade Tariffs Add Pressure
2 MIN READ

Trump's Trade Tariffs Add Pressure to H&M's Struggling Sales

US Implements 25% Car Tariffs
2 MIN READ

US Implements 25% Car Tariffs to Boost Domestic Production

Sweden to Cut Ties with
3 MIN READ

Sweden to Cut Ties with Underperforming Job Placement Firms

US Tariffs Trigger Global Stock
1 MIN READ

US Tariffs Trigger Global Stock Market Dip; Volvo and Banks Hit Hard

SBAB Increases Fixed-Rate Mortgage Interest
1 MIN READ

SBAB Increases Fixed-Rate Mortgage Interest by 0.10 Points

Second-Hand Market Sees Over 40
1 MIN READ

Second-Hand Market Sees Over 40 Percent Drop in February

Tokyo Stocks Dip as US
1 MIN READ

Tokyo Stocks Dip as US Tariff Threats Shake Asian Markets

Japanese Car Stocks Tumble After
1 MIN READ

Japanese Car Stocks Tumble After Trump's Tariff Announcement

US Considers Lower Tariffs for
1 MIN READ

US Considers Lower Tariffs for China in Tiktok Sale Deal

Trump's Vehicle Tariffs Spark EU
2 MIN READ

Trump's Vehicle Tariffs Spark EU Regret and Market Reactions

Wall Street Dips as Traders
2 MIN READ

Wall Street Dips as Traders Brace for Trump's Tariff Announcement

Swedish Player Wins Record 1.25
2 MIN READ

Swedish Player Wins Record 1.25 Billion Kronor: What's Next?