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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.

Tesla Shares Drop Nearly 8% as Elon Musk’s ‘America Party’ Sparks Investor Concern

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Tesla’s stock fell close to 8% on Monday amid mounting investor worries over CEO Elon Musk’s new political venture, the so-called ‘America Party,’ which raises doubts about his focus on the company’s future. The announcement came shortly after a public clash with former President Donald Trump, who dismissed Musk’s political move as “ridiculous” and threatened to cut subsidies worth billions to Musk’s companies, escalating a feud that previously erased $150 billion from Tesla’s market value in a single day.

Tesla’s shares have already dropped 35% since their record high last December, making it the worst-performing stock among the high-profile “Magnificent Seven” tech firms this year. The company also reported its second consecutive quarterly decline in vehicle deliveries, intensifying pressure on its stock.

Investors voiced frustration over Musk’s political distractions. Shawn Campbell, adviser at Camelthorn Investments, said, “I and every other Tesla investor would prefer to be out of the business of politics. The sooner this distraction can be removed and Tesla gets back to actual business, the better.”

Tesla now faces a challenging sales target, needing to deliver over one million vehicles in the second half of the year to avoid another annual sales decline amid ongoing tariff-related economic uncertainty and fallout from Musk’s political involvement. Should losses persist, Tesla could see its market valuation shrink by over $80 billion, while short sellers stood to gain about $1.4 billion on Monday alone.

Tesla Board Under Scrutiny

Musk’s political ambitions have also put Tesla’s board of directors under the spotlight. Despite rumors of potential leadership changes, board chair Robyn Denholm denied any plans to replace Musk. However, some investors, such as Azoria Partners, have expressed concern. Azoria delayed launching a Tesla ETF, with CEO James Fishback stating the board must assess whether Musk’s political role is compatible with his CEO responsibilities.

Tesla’s board has faced criticism for lacking firm oversight of Musk, who manages five other companies alongside Tesla and now a political party. Ann Lipton, a business law professor, argued, “This is exactly the kind of thing a board of directors would curtail — removing the CEO if he refused to curtail these kinds of activities.”

Despite Musk’s dominant shareholder status, the board has the authority to replace him without a shareholder vote, though such a move remains unlikely given their historical support. Lipton added, “The Tesla board has been fairly supine; they have not… taken any action to force Musk to limit his outside ventures, and it’s difficult to imagine they would begin now.”

Impact on Broader EV Market

Tesla’s stock movements heavily influence the entire electric vehicle (EV) sector. Shares of smaller EV makers Rivian and Lucid also fell around 3.5%. Analyst Craig Irwin of Roth MKM said, “Tesla is the umbrella stock for the EV space. Generally, EV stocks price up into the Tesla valuation.”

The impending expiration of the EV tax credit subsidy at the end of September (earlier than previously expected) is also expected to dampen near-term EV sales, affecting all automakers in the segment, noted Morningstar analyst Seth Goldstein.