Northvolt, EU uncovered for 300 million. And Vw devalues ​​the stake | EUROtoday

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The current submitting for chapter safety within the United States (chapter 11) by Northvolt, the Swedish battery producer, has shined a highlight on the difficulties Europe faces in constructing a self-sustaining worth chain for the vitality transition. Northvolt was thought-about a elementary participant within the race for decarbonisation, however has collected money owed of over 5 billion and is making an attempt to reorganise, beginning with the change on the high, with the resignation of CEO and co-founder Peter Carlsson. The European Commission, a long-time supporter of the mission, has reiterated its dedication to strengthening a aggressive industrial ecosystem, however the case raises questions concerning the effectiveness of present methods and the sustainability of such bold progress fashions within the face of Asian competitors ( China, South Korea, Japan) which dominates the worldwide high ten.

European Union uncovered for 313 million

Johanna Bernsel, spokesperson for the EU Commission for the inner market, underlined that the Union is uncovered to 313 million {dollars} by way of loans assured by the European Fund for Strategic Investments. Despite the efforts of the European Battery Alliance (which incorporates, amongst others, the Acc consortium of Stellantis, Mercedes-Benz and Total Energies) the slowdown in demand for electrical vehicles in 2024 has compelled a slowdown in operations. Until two years in the past Benchmark Minerals estimated that by 2030 Europe might develop a manufacturing capability of round 790 GWh (in the present day the primary on the planet, the Chinese Catl, has a capability of 170 GWh) by way of the creation of gigafactories for the manufacturing of batteries. Enough capability to assemble practically 15 million electrical automobiles.

There are presently plans for 27 gigafactories by 18 completely different firms. Among these, many are joint ventures between automakers and battery part producers. But the timescales have stretched out and the collapse of Northvolt, which started final June when BMW canceled a 2 billion order, places a query mark on the feasibility of those initiatives, particularly in a quickly altering market context.

Volkswagen and the impression of the Northvolt disaster

The Volkswagen group, Northvolt’s largest shareholder with a 21% stake, is among the many gamers most affected by the Swedish firm’s disaster. The German firm has progressively devalued its stake (by 2021 it had invested a complete of 1.4 billion euros), which on the finish of 2023 was value 693 million, already a 25% drop in comparison with the earlier yr. In 2024, the state of affairs has worsened additional, reflecting Northvolt’s manufacturing issues and fewer sturdy than anticipated demand for electrical automobiles in Europe. But it have to be added that VW has distanced itself, operationally talking, from its Swedish subsidiary. The German large has more and more guess on its subsidiary PowerCo, in three way partnership with the Belgian firm Umicore. This three way partnership was introduced in 2022 and entails an funding of €3 billion to provide key battery supplies in Europe. The purpose is to succeed in an annual capability of 160 GWh by the tip of the last decade, sufficient to energy round 2.2 million electrical automobiles per yr. Furthermore, final July the enormous VW signed an settlement with Quantumscape, primarily based in San José (California) to create solid-state lithium-metal batteries with a capability of 40 and as much as 80 GWh.

Volkswagen, whereas forecasting an working margin of 5.6% and web money stream of two billion euros for 2024, didn’t immediately touch upon the monetary impression of the chapter. However, the devaluation highlights the sector’s uncertainties and raises questions concerning the effectiveness of such giant investments in an unstable industrial panorama.