Verdict on Northvolt: Cannot survive

Published 23 September 2024 at 17.21

Economics. Christian Sandström, associate professor at Chalmes, warns that Northvolt is neglected and cannot survive despite firing a quarter of the workforce today. The reason is, among other things, that the company does not master battery production but mostly functions as an empty brand for old Chinese technology.

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The company has profound production problems at the facility in Skellefteå and has become dependent on the Chinese state, which paved the way for the financial crisis that the battery manufacturer is in according to Sandström.

The business world previously revealed that the state-owned Chinese company Wuxi Leads in practice handles the most important part of battery manufacturing with its own staff on site in Skellefteå, in particular the part of the manufacturing where the parts of the battery are put together and the battery cells are filled with electrolyte.

But it is not the latest technology that the company uses – because China does not want to share it – but 30-year-old technology that also has to be handled by Chinese operators.

“There were several hundred Chinese on site. They had total control and did exactly what they wanted,” said a civil engineer with insight into the business to Affärsvärlden.

The company is portrayed in the article as yet another empty Swedish brand used for Chinese-produced technology, in this case outdated Chinese battery manufacturing.

The main function of the Northvolt brand appears to be attracting politicians and tax-funded investment rather than producing its own technology for steering wheel manufacture batteries. The only problem is that the Chinese technology is old, doesn't work and that the company automatically finds itself in an unfavorable competitive situation vis-à-vis companies in China.

Sandström now tells Aftonbladet that Northvolt cannot survive.

– The company is neglected. Peter Carlsson had a background in purchasing and logistics at Tesla. It seems that the company has failed in exactly this area, he says of Northvolt's CEO.

– I don't understand how they can survive.

“It is just to state that there are a number of countries in Asia that are leading, that have the cutting-edge expertise in battery production today. They dominate the supply chains when it comes to batteries. There, China is a very important actor”, Northvolt's communications manager Matti Kataja has previously said.