{"id":488569,"date":"2024-09-30T06:30:00","date_gmt":"2024-09-30T04:30:00","guid":{"rendered":"https:\/\/innovationorigins.com\/?p=488569"},"modified":"2024-09-30T06:30:00","modified_gmt":"2024-09-30T04:30:00","slug":"northvolts-crunch-is-europes-battery-industry-crisis","status":"publish","type":"post","link":"https:\/\/ioplus.nl\/archive\/en\/northvolts-crunch-is-europes-battery-industry-crisis\/","title":{"rendered":"Northvolt’s crunch is Europe’s battery industry crisis"},"content":{"rendered":"\n

Last week, Swedish battery manufacturer Northvolt announced 1600 layoffs \u2013 20% of its workforce \u2013 and a general rescoping of its operations. \u201cThe decisions are, however, necessary to adjust for current realities and enable the long-term success of Northvolt,\u201d stated<\/a> Peter Carlsson, CEO of the company. <\/p>\n\n\n\n

Northvolt has often been dubbed Europe\u2019s beacon of hope in the global race for electric vehicle (EV) battery production, a market dominated by Chinese producers CATL and BYD. In the eight years since its existence, the company has raised $15 billion\u2014more than any other European private startup\u2014signing deals with automakers such as Volkswagen and Volvo.<\/p>\n\n\n\n

Why this is important:<\/h2>

Most electric car batteries are produced in China, with Europe lagging in manufacturing. A local battery production chain is needed to keep Europe competitive and less dependent. <\/p><\/div>\n\n\n\n

Despite its rapid growth, Northvolt is struggling to increase its production capacity. At the beginning of 2024, the company announced that it tripled its production capacity to 60,000 battery cells per week.  Yet, this amount is far from the announced annual output of 1 GWh of batteries\u2014needed to power 17,000 cars. Frustrated by the slow buildup, in June, BMW\u2014one of the top shareholders\u2014canceled a $2 billion<\/a> battery cells contract, resorting to Samsung instead. The lower-than-expected demand growth also forced the company to cut its costs. <\/p>\n\n\n\n

Struggle to compete<\/h2>\n\n\n\n

With the European battery champion navigating headwinds, the Old Continent battery industry’s unpreparedness is exposed. \u201cWe are trying to build European capacity based on a global free trade system and business as usual. We could pick many more examples of companies working on the net zero transition, and they cannot succeed,\u201d underlines David Peck. He is an associate professor of critical materials and product design at the Delft University of Technology.\u00a0<\/p>\n\n\n\n

Julia Poliscanova, senior director of vehicles and electric mobility at NGO Transport & Environment (T&E), also stresses the role of global dynamics in hampering Norhvolt\u2019s growth. \u201cChina is prepared to sell excellent technology that we don\u2019t have in Europe yet for cheaper. This makes it incredibly hard for European companies to compete.\u201d<\/p>\n\n\n\n

Having established an efficient production chain, Beijing dominates battery manufacturing, having more production capacity than the rest of the world. According to EV Volumes<\/a>, over 680 GWh of battery cells were produced in 2023. Chinese company CATL was by far the largest producer, with over 243 GWh of manufactured cells, followed by compatriot firm BYD with 117 GWh.\u00a0<\/p>\n\n\n\n