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Lyten Acquires Bankrupt Northvolt, Aiming to Revive Europe’s Battery Ambitions

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U.S.-based battery startup Lyten has agreed to purchase most of bankrupt Swedish battery maker Northvolt, potentially offering the fallen European giant a second chance. The Silicon Valley company, backed by Stellantis and FedEx, specializes in developing lithium-sulphur cells — a cleaner alternative to traditional lithium-ion batteries.

Northvolt, once seen as Europe’s strongest contender against major Asian EV battery makers, filed for bankruptcy in March, marking one of Sweden’s largest corporate failures. Lyten CEO Dan Cook told Reuters the deal, struck at a “substantial discount” to the original asset value, aims to continue the work Northvolt had started. Swedish Deputy Prime Minister Ebba Busch welcomed the agreement, calling it key to Europe’s energy independence.

Northvolt’s downfall was attributed to production challenges and failing to meet quality expectations, despite strong backing from customers like Scania. While Scania has not confirmed future orders from Lyten, it expressed satisfaction with the acquisition.

Lyten plans to restart Northvolt’s flagship Skelleftea plant in northern Sweden, with the goal of resuming lithium-ion battery deliveries by 2026. The acquisition also includes Northvolt’s energy storage business in Poland, its projects in Sweden and Germany, and its intellectual property. Work is underway to take over its Canadian operations as well.

Several former Northvolt executives will join Lyten, though not founder Peter Carlsson. The company will initially focus on securing high-yield production for a single customer before expanding to a broader market, targeting the automotive, defense, and energy storage sectors.

Lyten recently raised over $200 million in new equity to support its acquisitions and expansion, and Cook expressed confidence that automakers like BMW, Volkswagen, and Audi — once part of Northvolt’s $50 billion order book — could return sooner than expected.

Silicon Valley Startup Lyten Aims to Revive Europe’s Battery Ambitions by Acquiring Northvolt Assets

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Lyten, a U.S.-based startup specializing in lithium-sulphur battery technology, announced it will acquire the remaining assets of bankrupt European battery maker Northvolt in Sweden and Germany. This move could rekindle hopes for building a robust European electric vehicle (EV) battery industry and reduce dependency on Chinese suppliers.

About Lyten:
Founded in 2015 in California, Lyten began in a shipping container and has since attracted major backers including Stellantis, the parent of Chrysler, and logistics giant FedEx. The company develops lithium-sulphur battery cells, a promising alternative to conventional lithium-ion batteries. In 2024, Lyten unveiled plans to build the world’s first lithium-sulphur battery gigafactory in Reno, Nevada, with an investment exceeding $1 billion. Over the past year, Lyten has also acquired Northvolt’s U.S. R&D hub and Europe’s largest energy storage systems factory.

Northvolt’s Collapse:
Sweden’s Northvolt entered U.S. Chapter 11 bankruptcy in 2024 after struggling to scale production at its main plant despite strong demand and backing from automakers like BMW, Volkswagen, Volvo Cars, and Audi. The company once held a $50 billion order book, but bankruptcy wiped this out. Northvolt had raised over $10 billion since its founding in 2016 and employed over 6,000 people at its peak. Volkswagen and Goldman Sachs were among its largest shareholders.

Significance of Lithium-Sulphur Batteries:
Lithium-sulphur technology is seen as a game-changer for EV batteries because it can be up to two-thirds cheaper than lithium-ion cells. Unlike lithium-ion batteries, lithium-sulphur cells avoid costly and supply-concentrated materials like nickel, cobalt, and manganese, many of which are predominantly sourced from China. This makes lithium-sulphur batteries potentially cheaper and more sustainable.

Backers of Lyten:
Lyten has secured more than $625 million in funding from investors such as Stellantis, FedEx, Honeywell, Boeing and Airbus suppliers, venture capital firm Prime Movers Lab, and Canadian mining company Wallbridge.

Rivian and Lucid Warn of Challenges Ahead Amid Policy Shifts and Supply Chain Disruptions

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Electric vehicle makers Rivian (RIVN.O) and Lucid (LCID.O) reported disappointing quarterly earnings and issued cautious outlooks, citing impacts from changing U.S. policies, trade tensions, and supply chain issues. Rivian’s shares dropped about 4% after hours, while Lucid’s shares fell 7%.

Both companies are grappling with multiple headwinds under the Trump administration, including the removal of consumer tax credits, imposition of high tariffs on auto parts imports, and the elimination of emission fines for gas vehicle manufacturers. Additionally, China’s restrictions on exporting heavy rare earth metals—critical for EV motors—have disrupted supply chains and increased production costs in the U.S.

Rivian revealed rising costs in Q2 due to rare earth supply disruptions and raised its adjusted core loss forecast for 2024 as revenue from regulatory credit sales dwindles. The cost per vehicle rose approximately 8% year-over-year to about $118,375, largely reflecting lower production volumes rather than operational inefficiencies, CEO RJ Scaringe explained. Lower production contributed to a $14,000 increase in cost of goods sold per vehicle.

The company plans a three-week production pause in September (following a one-week pause in Q2) to integrate components and prepare for the critical launch of its smaller, more affordable R2 SUV next year.

Lucid said it largely avoided rare earth supply issues by using inventory magnets but faced tariff-related costs that pressured profit margins. The luxury EV maker also lowered its annual production forecast.

The expiration of the $7,500 federal EV tax credit at September’s end removes a key demand driver. Analysts expect a sales surge in Q3 as buyers rush to benefit from the incentive before it ends, followed by a possible softening in Q4. Lucid’s interim CEO Marc Winterhoff noted the company is planning countermeasures to mitigate the expected demand slowdown.

The Trump administration’s removal of fuel economy penalties has severely reduced demand for regulatory credits, a significant revenue source for Rivian and Lucid. Rivian said it now expects about half of its initially forecasted $300 million in credit revenue this year and does not anticipate any revenue from credit sales in H2 2024.

Rivian raised its adjusted core loss forecast to between $2 billion and $2.25 billion for 2024, up from prior guidance of $1.7 billion to $1.9 billion, but expects to roughly break even on gross profit. The company also anticipates record deliveries in Q3 across consumer and commercial segments, including its electric delivery vans for Amazon, its largest shareholder.