Sweden rules out state investment in troubled battery maker Northvolt

Swedish government has ‘no plans’ to take a stake in struggling lithium-ion battery manufacturer Northvolt, Deputy Prime Minister Ebba Busch said Tuesday as the company struggles with financial instability and operational problems. Europe’s flagship electric vehicle battery maker Northvolt, once on top of its game, considers options to survive. Its future has been overshadowed by production issues, the loss of a key customer, and funding problems, resulting in job cuts and suspended operations.  

Busch, also Minister for Energy, Business and Industry, said to Reuters that ‘To develop an entirely new system that doesn’t exist today is not on the table’. For example, Northvolt is not on the table when it comes to state ownership. Ruling out direct government investment in the troubled company, Prime Minister Ulf Kristersson echoed similar sentiments in September.  

When asked about Northvolt’s struggles, Busch stressed that Sweden’s green transition continued to proceed according to schedule. Planned investments in green industries exceed 1 trillion Swedish crowns (USD 91 billion), with a focus on the north of Sweden, which provides access to cheap, clean electricity.  

Busch noted “that there are major investments in the green transition across Sweden, in word or deed related to Northvolt’s project.” But she also caveated Northvolt’s strategic importance for Sweden and Europe.  

Busch also added that Northvolt is crucial to Sweden and the EU as we are in a certain industrial competition with China and the US.  

Northvolt is reportedly mulling bankruptcy protection in the United States as one tactic to help it survive amid its financial woes, sources close to the matter said.  

Europe’s bid to build self reliant EV battery supply chain and take on China and the U.S. faces broader challenges, as highlighted by Northvolt’s struggle.  

While Sweden remains committed to fostering green industries, the future of its once-promising battery champion remains uncertain, leaving questions about the impact on Europe’s ambitions for EV leadership.