Northvolt Sells Remaining Stake in Battery Recycler to Hydro Amid Financial Struggles

Swedish battery maker Northvolt has sold its remaining stake in the battery recycling company Hydrovolt to Norwegian aluminium giant Norsk Hydro for 78 million Norwegian crowns ($6.79 million), making Hydro the sole owner of the recycler. This transaction marks a significant shift for Northvolt, which has been facing financial difficulties and production challenges. Once considered a potential leader in Europe’s electric vehicle (EV) battery sector, Northvolt has been scaling down operations and struggling with a funding crisis.

Northvolt, which filed for Chapter 11 bankruptcy protection in the U.S. in November, has been forced to halt funding for many of its joint ventures and non-core businesses. As part of its restructuring, Northvolt has divested various units, including its on-site battery materials recycling business, Revolt, although it remains involved in a commercial collaboration with Hydrovolt. This collaboration will continue even after Hydro assumes full ownership of Hydrovolt, which specializes in recycling end-of-life batteries.

Hydrovolt’s new status as a wholly owned subsidiary of Hydro is part of Norsk Hydro’s broader strategy to invest in sustainable technologies, albeit with a focus on recycling rather than new battery production. A Hydro spokesperson noted that battery recycling fits well with Hydro’s existing operations in the automotive industry, where it supplies aluminium. However, Hydro stated that it intends to eventually find a new partner to help develop Hydrovolt further.

Northvolt’s exit from the recycling business aligns with its decision to focus on battery cell production. The company has been scaling back and winding down other parts of its operations in an attempt to stabilize. While Hydro is not interested in purchasing Northvolt’s Revolt unit, it remains committed to working with Northvolt on the supply of “black mass,” a crucial material produced through the recycling process.

The sale is expected to close by the end of the quarter, subject to court approvals under Northvolt’s ongoing Chapter 11 process. Northvolt, which has been working to secure additional funding, is set to update a U.S. bankruptcy judge on its financial situation on January 28th. The company is also negotiating with investors to secure new capital to keep operations running.