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Northvolt Moves Toward Longer-Term Bankruptcy Financing

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Swedish electric vehicle battery manufacturer Northvolt announced on Friday that it is making progress toward securing additional bankruptcy financing, with plans to finalize the arrangement by late January. Since entering bankruptcy on November 21, the company has engaged with over 100 potential lenders and investors to secure the necessary funds for its restructuring.

Northvolt’s initial bankruptcy loan, a $100-million facility from Swedish truck maker Scania, was meant to help the company through the early stages of its restructuring. However, it was not intended to carry the company through the entirety of the bankruptcy process. The company is now actively evaluating proposals from both strategic and financial investors to provide long-term financing.

At a court hearing in Houston on Friday, Northvolt’s attorney, Jack Luze, confirmed that the company is working on a longer-term financing proposal, which will be presented to U.S. Bankruptcy Judge Alfredo Perez during a court session scheduled for January 28.

Judge Perez approved the bankruptcy loan in full on Friday, after previously allowing the company to access the initial $51 million from the loan. A Northvolt spokesperson expressed satisfaction with the progress, noting the approval of the loan as an important step in the restructuring process.

The company, which has raised over $10 billion in an effort to produce electric vehicle batteries and compete with dominant Chinese manufacturers, remains operational with around 6,600 employees across seven countries. Northvolt is hopeful that its bankruptcy restructuring will allow it to continue business as usual while addressing its financial challenges.

 

European Battery Hopes Depend on Chinese Partnerships Post-Northvolt Collapse

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The collapse of Northvolt has not entirely derailed Europe’s ambitions to develop its own electric vehicle (EV) battery industry, but the continent’s progress now increasingly relies on Chinese investment and expertise.

Slovakian startup InoBat exemplifies this shift. The company faced funding challenges until Gotion, China’s fifth-largest battery maker, acquired a 25% stake and entered a joint venture with InoBat to build gigafactories in Europe. On Friday, InoBat announced €100 million ($104 million) in Series C funding, pushing its total capital raised to over €400 million. This development, coming shortly after Northvolt’s financial troubles, signals that European EV battery projects can still attract investors—albeit often with significant Chinese backing.

Executives and analysts suggest that future European battery ventures are likely to involve joint ventures with Chinese firms, mirroring the Gotion-InoBat partnership and a recent agreement between Stellantis and CATL. According to Lacie Midgely, a research analyst at Panmure Liberum, institutional investors now seek strategic partnerships before committing to funding.

China’s dominance in battery production is evident in companies like Gotion, which boasted a production capacity of 150 gigawatt hours (GWh) in 2023, enough to power up to 2 million cars. By 2025, this figure is expected to reach 270 GWh, far outpacing Europe’s current capabilities.

Partnerships and Progress

The Gotion-InoBat Batteries (GIB) joint venture has proven advantageous for InoBat, securing investor confidence by leveraging Gotion’s experience and scale. Vikram Gourineni, executive director at Indian battery maker Amara Raja—a key investor in InoBat’s latest funding round—highlighted that automakers prefer proven large-scale capabilities to mitigate risks in their EV programs.

InoBat operates a pilot production line in Voderady, Slovakia, and is building a high-performance 4 GWh gigafactory. The company also plans a $1.2 billion, 20 GWh facility in Surany, Slovakia, slated to supply batteries for 200,000 EVs annually starting in 2027. Volkswagen, which owns a 24.45% stake in Gotion, is a major partner, with Slovak government aid contributing €214 million to the project.

GIB’s strategy focuses on low-cost, high-volume production, leveraging Slovakia’s automotive manufacturing hub and proximity to major German, Czech, and Hungarian markets.

Challenges for Independent European Projects

Northvolt’s failure to compete with Chinese giants like BYD and CATL has cast doubt on other independent European battery startups. In 2024, at least eight companies postponed or canceled European EV battery projects, while the continent’s projected battery pipeline capacity through 2030 fell by 176 GWh, according to Benchmark Minerals.

However, some projects show promise. French startup Verkor, backed by Renault, has raised €3 billion to build a 16 GWh gigafactory in Dunkirk, expected to produce batteries for 300,000 EVs annually by 2028. Meanwhile, UK-based Ilika focuses on licensing its solid-state battery technology rather than building gigafactories, catering to niche markets such as medical devices and potentially EVs.

The Role of Chinese Expertise

European startups increasingly rely on Chinese partners to navigate technical and financial hurdles. Gotion’s collaboration has accelerated InoBat’s development, enabling faster problem-solving and cost management. CEO Marian Bocek noted that InoBat’s high-performance batteries are undergoing testing by premium automakers like Ferrari, while its GIB joint venture ensures large-scale production.

Analysts like Andy Leyland of SC Insights suggest that automakers and investors prefer de-risking production by relying on the expertise of established Asian battery manufacturers. “The Chinese have mastered low-cost mass production, so if you want batteries made, most likely Asian battery makers will make them,” Leyland said.

Despite these challenges, Europe’s battery ambitions remain alive, albeit increasingly intertwined with Chinese partnerships that provide the scale and expertise necessary to meet growing EV demand.

 

Stellantis and CATL to Build $4.33 Billion EV Battery Factory in Spain

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Stellantis and Chinese battery manufacturer CATL have announced a joint investment of €4.1 billion ($4.33 billion) to establish a new electric vehicle (EV) battery factory in Zaragoza, Spain. The two companies will form a 50-50 joint venture and aim to start production by the end of 2026. The plant could have a production capacity of up to 50 gigawatt hours, depending on market growth and regulatory support.

Boost to European EV Battery Production

The collaboration between Stellantis and CATL is part of Europe’s efforts to reduce its reliance on Asia for EV batteries and increase its competitiveness against the United States in the race for green subsidies. The move comes as the region continues to attract battery manufacturers despite challenges such as regulatory delays, production issues, and slower-than-expected demand for electric vehicles.

In recent months, European battery makers have faced significant setbacks, with Sweden’s Northvolt filing for Chapter 11 bankruptcy after losing a major customer. However, the new Zaragoza plant represents a step forward for both companies, leveraging the region’s clean energy initiatives.

CATL’s Expansion in Europe

The Zaragoza factory will be CATL’s third European plant, following its existing facilities in Germany and Hungary. The German plant, established six years ago, has an investment of €1.8 billion, with a planned capacity of 14 gigawatt hours. The Hungarian plant, under construction, will see a €7.3 billion investment and target a much larger capacity of 100 gigawatt hours.

Stellantis’ Broader EV Strategy

Alongside its partnership with CATL, Stellantis is a major investor in the ACC battery joint venture, which also includes Mercedes and TotalEnergies. ACC has begun production in France, although the development of additional plants in Italy and Germany has faced delays due to a dip in EV demand.