The future for troubled Northvolt may look bleak.
This is the opinion of Christian Sandström, researcher and columnist at Affärsvärlden, who says that drastic measures are required for the company to survive.
– In order to sort this out, new owners and new management need to come in, and that might be via bankruptcy or reconstruction.
The battery company Northvolt has been in crisis for a period. In 2023, the company lost 12.5 billion.
– You cannot lose that much for so long before you are bankrupt. Then you need to bring in new money, and that is very difficult to do when the market has no confidence, says Christian Sandström.
Today’s announcement about laying off 1,600 people is therefore not unexpected, says Sandström.
– Unfortunately, I am not surprised, there could have been even worse news given the company’s permission.
Bankruptcy or reconstruction current
The battery industry is getting tougher, and competition from China, among others, is growing. But the background to Northvolt’s crisis is also connected to its own production, he explains.
– You have substandard production equipment, where you have become dependent on a number of Chinese suppliers, who deliver equipment and machines that are outdated and much of which is written in Chinese. The production does not work for several reasons.
The only way for Northvolt to survive now is new owners with new capital and a new management, which could happen via bankruptcy or a reconstruction, says Sandström.
– I don’t see that anyone wants to put money in as it looks today, the problems with the production seem to be very serious.
Think the CEO may be forced to leave
He believes that this change must happen in the near future.
– A lot has to be put in place within the coming months, you can’t bleed so much money and have problems with production and the working environment, without something drastic having to be done.
That the management with CEO Peter Carlsson is forced out can be difficult to avoid, says Sandström.
– In the end, there may be no other option.