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Northvolt Sells Novo Energy Stake to Volvo, Eyes North American Expansion

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Swedish battery manufacturer Northvolt has agreed to sell its stake in Novo Energy, its joint battery venture with Volvo Cars, as part of a broader cost-cutting strategy. The company will now explore new supply opportunities in North America while Volvo takes full control of Novo’s operations.

Key Details:

  • Stake Sale to Volvo: Northvolt, facing financial difficulties and under U.S. bankruptcy protection, ceased funding for joint ventures in 2024. As a result, Volvo declared a contract breach in October and moved to acquire Northvolt’s stake in Novo Energy.
  • Bankruptcy Court Approval Needed: A U.S. bankruptcy court must approve the sale. Financial terms were not disclosed.
  • Focus on Core Business: Northvolt is divesting projects in Poland and Norway to sustain its battery production, with key gigafactories planned in Sweden, Germany, and Canada—though some are facing delays.
  • Volvo Seeking a New Partner: Volvo has not yet announced a new partner for Novo but remains committed to launching battery production at its Gothenburg factory by 2026.
  • North American Expansion: Despite losing its planned battery orders from Volvo, Northvolt sees potential for new supply agreements in North America, particularly at its upcoming Northvolt Six plant in Montreal.

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

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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.

 

Slovak Battery Maker InoBat Secures €100 Million in Latest Funding Round

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Slovak battery manufacturer InoBat announced on Friday that it has raised €100 million ($104 million) in its latest funding round, the largest for a technology company in Slovakia to date. This investment was led by Gotion High Tech, the Chinese battery cell maker and InoBat’s strategic partner. Other contributors included Slovakia’s sovereign wealth fund, Lilium, Bromo Capital, IPM Group, and Cielo Capital, alongside strategic investors such as Amara Raja and Rio Tinto.

Industry Significance

The announcement comes on the heels of Swedish EV battery maker Northvolt’s recent filing for Chapter 11 bankruptcy in the U.S., which has cast uncertainty over the future of Europe’s electric vehicle (EV) battery industry. Northvolt has been seeking to offload its electric industrial battery business by the end of the year, reflecting challenges faced by the sector.

In contrast, InoBat’s latest funding round highlights continued investor confidence in the Slovak company, particularly as Slovakia positions itself as a key player in Europe’s efforts to strengthen its EV battery industry and reduce reliance on Asian suppliers.

Background

In June, Slovakia’s Economy Minister Denisa Sakova announced a €1.2 billion investment plan by Gotion and InoBat to construct an EV battery plant in Slovakia. This project would represent the second-largest investment in the country’s history, underscoring the importance of the automotive sector to Slovakia’s economy.

Despite slower-than-expected demand for EVs, European countries have been competing to attract investments to bolster local battery production capacity.

Strategic Advantages

Andy Palmer, chairman of InoBat’s board, emphasized the importance of the company’s strategy in addressing Europe’s lag in battery technology. “Western Europe has been slow to react to the critical need for battery technology. InoBat has quietly gone about building both its own high-performance cell technology and its pragmatic partnership with Gotion to produce cost-effective cells,” Palmer stated.

Looking Ahead

InoBat plans to scale up the production of European-designed battery cells over the coming year and launch an energy storage business in collaboration with Gotion. Additionally, the company aims to start another funding round to support its expansion across Slovakia, Serbia, and Spain, while accelerating its presence in new markets.

This funding marks a significant step for InoBat as it seeks to meet growing demand for cost-effective and high-performance EV battery solutions amid a shifting European battery landscape.