Expansion scaled back at electric car battery champion after mystery deaths

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      Europe’s best bet for battery manufacturing is poised to scale back a big expansion offensive amid mounting financial losses.

      Swedish battery maker Northvolt, which has raised more than £10bn to take on China, has hinted that it could delay new factories in Germany, Canada and Sweden.

      Several problems with its first gigafactory in Sweden have prompted it to launch a strategic review, in a story first reported by the Financial Times.

      It comes after the promising start-up has also been plagued by a series of unexplained accidents, with five employees dying since November last year.

      Two deaths occurred at the factory in separate accidents, whereas three others took place off-site and were described as a “tragic coincidence” by the company.

      Authorities have sought to ease concerns by saying there was “no concrete connection” between the deaths nor “suspicion of crime”.

      The battery maker has struggled financially amid pushing against obstacles to ramp up its production on a larger scale at its first factory.

      Its operating losses more than tripled to £800m last year, the business said on Tuesday.

      BMW recently pulled out of a £1.7bn contract citing significant delays and quality issues, opting instead for an Asian supplier.

      Northvolt and BMW said the companies had “jointly decided to focus Northvolt’s activities on the ambition of developing the next generation of battery cells”.

      Northvolt’s board will meet in September to discuss how to tackle these challenges in the face of intense competition.

      Peter Carlsson, the company’s chief executive, told the Financial Times: “We need to prove that we can match [Asian suppliers] in execution.

      “That’s why we are also doing a strategic overview of our business plan and our growth plan so that the core engine of Skellefteå is getting up and running before we take the next steps of moving along.”

      The site in Skellefteå, which Northvolt brands as Europe’s first homegrown battery factory, is located near the Arctic Circle near the border with Finland.

      The company is seeking to sell lithium-ion batteries powered by renewable energy from a hydroelectric plant that it promises will have a 90pc lower carbon footprint than competitors.

      It will also recycle nearly all components made from rare materials such as nickel and manganese.

      However, the start-up’s complications with expanding its production has led to delays in orders for some of its largest customers.

      Northvolt has received orders from manufacturing giants like Volkswagen, Siemens and Scania for $50bn (£40bn).

      However delays have also forced Scania to slow the rollout of its electric HGVs.

      Northvolt had planned to create thousands of jobs through new battery factories in Germany and Canada.

      But these plans could now be pushed back as Mr Carlsson tries to steady the ship.

      The company has also put plans for an initial public offering on hold amid its difficulties to grow its production and the challenging market for listings.

       

      In other news – Renault’s electric vehicle unit Ampere said on Monday it would include lithium iron phosphate (LFP) technology in its plans to mass produce EVs, teaming up with LG Energy Solution (LGES) and CATL to build a supply chain in Europe.

      • This topic was modified 1 week, 5 days ago by kezo. Reason: added content
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