Katherina Reiche, German Minister for Economic Affairs and Energy, attends the 13th session of the German Bundestag. Jörg Carstensen/dpa
The German government’s investment in the crisis-hit Swedish electric vehicle battery manufacturer Northvolt was “mistaken,” Economy Minister Katherina Reiche told a parliamentary committee on Wednesday.
The decision by her predecessor, Robert Habeck, to fund the construction of a Northvolt plant in northern Germany was taken “with good intentions,” Reiche said, but was wrong.
According to media reports, the Federal Audit Office is accusing Habeck of having allocated taxpayers’ money to Northvolt far too carelessly and of underestimating the economic risks.
The company filed for insolvency in Sweden in March.
The fate of its site near Heide, in the northern German state of Schleswig-Holstein, is unclear.
Northvolt has received around €600 million from Germany’s KfW state development bank for the construction of the site, with an additional €20 million spent on interest and procedural costs.
The European Commission also approved direct subsidies totalling €700 million in early 2024, although the money has not been paid out.
The government’s decision to invest in the Northvolt site was linked to a report from consulting firm PwC from June 2023, which has been seen in redacted form by dpa.
The document shows that the auditors considered repayment of the government investment, including interest, to be “plausible.”
Northvolt’s battery cells were seen as having high sales potential, but the report warned that the company was dependent on external investment to cover expenses.