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Northvolt goes from Europe battery promise to crisis
- deleted 2y ago[deleted]
- myspy 2y agoSo what is the learning here, why did it fail? From the timeline it looks like it spread out too much and didn‘t create a great product first.
- shinryuu 2y agoIt says in the article, they expanded too fast and i agree. Your other point also seems to hold.
- christkv 2y agoI think i read that they could not deliver the quality and quantity expected for automobile production. Bad product, overextension and I won’t be surprised if some graft will show up once they start digging. Norway has another such venture where the executive suite pays themselves handily and delivered nothing.
- cess11 2y agoNorthvolt also counted on cheap materials from Russia, e.g. infamously environment unfriendly nickel from Norilsk, which clearly didn't pan out after the 2022 invasion of Ukraine.
- buckle8017 2y agoNothing to learn here, they were just scamming various governments. That's why they promised to expand to so many places, each government subsidized them separately.
- leviliebvin 2y agoExpanding to multiple EU states is a requirement to satisfy the various governments if you are getting public EU funding. See Airbus for an example.
- rob74 2y agoThe difference is that Airbus didn't as much build new factories (and certainly not several at the same time) as it is a consortium (and later a unified company) of formerly independent European aerospace companies. E. g. their current German plants, Hamburg (commercial aircraft) and Donauwörth (helicopters) used to belong to MBB (https://en.wikipedia.org/wiki/Messerschmitt-B%C3%B6lkow-Blohm https://en.wikipedia.org/wiki/Messerschmitt-B%C3%B6lkow-Bloh...) and then DASA (https://en.wikipedia.org/wiki/DASA https://en.wikipedia.org/wiki/DASA). That's a consolidation similar to what happened in the US, albeit maybe with more "state interference".
- moomin 2y agoI read something once about the question of Airbus and Boeing subsidies. The short answer was “It’s complicated.” Of course, that particular question seems to have been rendered irrelevant by Boeing’s quality crisis.
- dukeyukey 2y agoAnd also kinda required from an economies-of-scale point of view. The US is spoilt by havbing a massive, culturally-and-language homogenous country. Despite their wealth, If you want to hit those scales in Europe you need many countries on your customer list. And since each country (usually) has it's own language, laws, norms, sometimes currency, it gets way complicated, way fast.
- blackeyeblitzar 2y agoThis is somewhat true, but I don’t think it is necessarily fair to them. Their strategy was to try to do everything themselves (except raw material mining). By having vertical integration across the battery space, they would be able to hopefully compete on price with the battery giants in China like CATL, while still working out of Europe, which is a lot more expensive in terms of labor costs, and regulation, and everything else. But they didn’t get that far and their biggest customers like BMW started abandoning them while waiting for deliveries to begin. This began the doom spiral. But it is possible that with more money and time this would’ve been the right strategy for the long term competitiveness of the company. Otherwise, if it’s going to be permanently uncompetitive what’s the point? Maybe this was indeed, some kind of scam for government subsidies. But I think it’s more about the difficulty of finding funding to do big things, and to do them properly.
- pas 2y agoDoing anything in the EU is hard, and since CABM is not even live yet it was unnecessarily extra-hard. And then it seems they were completely incompetent. (Custom middling quality machines ordered from Asia, they then weren't able to scale up the process and/or quality.) Of course, if it had worked it would have made a lot of money to a lot of people. https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en https://taxation-customs.ec.europa.eu/carbon-border-adjustme...
- em500 2y agoComments from insiders in Swedish[1] and Dutch[2]. Some snippets: ... In the end, they are just in a situation that is almost impossible to save. You have a factory full of machines that are substandard in quality, reliability and documentation. A huge 100% in-house tech stack that largely consists of Go pieces on Lambdas writing to DynamoDB. ... ... A gigantic factory full of mediocre Chinese equipment, what can you do with that? They are not standard things, they are things custom made for Northvolt but unfortunately with incomplete specifications. ... ...The whole market is not doing well in Europe. We don't really have the raw materials here (Northvolt's came mostly from China), we don't have the knowledge (that's in Asia) and we don't have the machinery for production. ... [1] https://old-reddit-com.translate.goog/r/sweden/comments/1g1xkmx/jag_%C3%A4r_ingenj%C3%B6r_p%C3%A5_northvolt_ama/?_x_tr_sl=sv&_x_tr_tl=en https://old-reddit-com.translate.goog/r/sweden/comments/1g1x... [2] https://tweakers-net.translate.goog/nieuws/228816/faillissement-dreigt-voor-zweedse-ev-accufabrikant-northvolt.html?showReaction=20506392&_x_tr_sl=nl&_x_tr_tl=en https://tweakers-net.translate.goog/nieuws/228816/faillissem...
- leviliebvin 2y agoPfft. Sure blame the Chinese equipment and not the corrupt and incompetent European management. The Chinese manage to produce batteries just fine.
- em500 2y agoMain equipment manufacture was Wuxi Lead, where naturally everyone speaks almost exclusively Chinese and all docs are in Chinese. Not a problem of course when most customers are also Chinese, much more so when they're European.
- panta 2y agoIf you are spending billions, surely you can bring in some people that speak both Chinese and the local language. Heck, there are even real-time translation services now. No, the problem is not technical, it's that it was a scam from the get go.
- johanneskanybal 2y agoYou can’t outsource something for decades then think throwing money at something will be enough to pick it up yourself on a tight timeline. Nor be surprised if your interests don’t align with a chineese actor you’re trying to replace.
- markus_zhang 2y agoI found a post supposedly written by a Chinese supplier of Northvolt. Not sure how true it is though so you will have to find some insiders to validate the story. You will need some software to translate the picture into English/other languages. https://imgur.com/AyQYtFj https://imgur.com/AyQYtFj
- toenail 2y agoThe promise that needed 1 billion in subsidies to build a new plant? As soon as the government got involved it was clear they couldn't be profitable on their own.
- riffraff 2y agoTesla got a ton of government subsidies, but is successful, there is no causal relation between the two things.
- toenail 2y agoTesla is still getting tons of subsidies, directly and indirectly. We'll see if they are successful once that stops.
- vardump 2y agoSo does the whole car industry. Directly or indirectly. The industry as a whole is nowhere near paying for its true health and environmental damage.
- tim333 2y agoTesla I think proved it was competent at making stuff before getting much subsidy. Northvolt seems to have got it up from without much battery making.
- atwrk 2y agoHave you seen China? Northvolts demise is completely orthogonal to the concept of subsidies.
- st-keller 2y agoSeems like Northvolt never really had a product. Can someone please explain why people invest billions in companies that have not sorted out how to build what they want to sell?
- ane 2y agoBattery cell production alone is massively expensive. The expenses in setting up a production line is counted in the billions. So the only way to start fresh here is to raise billions in capital. Unless you're Volkswagen or something, when you could invest billions in an enterprise like this one.
- jansan 2y agoVolkswagen has their own plans with its subsidary PowerCo, and since EV adoption is slower than expected, they may (partly) drop Northvolt in favor of PowerCo. Interestingly they canceled their plan for a second battery plant in Germany due to high energy costs. Regarding Germany: I still do not understand how you want to electrify everything, reduce CO2 emissions, and then shut down fully working nuclear power plants in the middle of an energy supply crisis. This is completely beyond me. I know there are people defending this decision, but I can only attribute this to malice or idiocy.
- oezi 2y ago> I still do not understand... Renewables? + some batteries + gas peaker as winter backup The nuclear plants weren't fully working anymore but taken into planned shutdown 10 years after the decision was made to shut them down. That people think Nuclear is a power technology where you can just nilly-willy decide to continue running is the real idiocy. Energy prices are now lower than before the run-up to the Russian war of aggression.
- jansan 2y agoThe decision to fade out nuclear power was made under the assumption of having an alternative reliable energy source (namely Russian gas). If your main assumption suddenly blows up (literally), do you really claim that stubbornly sticking to your original plan is the right way to go?
- brabel 2y agoIncredibly embarrassing for Europe and Sweden. Even with billions of investments from the big car companies, investors and many millions in subsidies, they simply couldn’t make it work at all. Instead of buying the California startup just to shut it down, should’ve invested most of their money there instead. They are leaving an enormous eyesore in the northern Sweden landscape with thoudands of people unemployed, many of which may be deported now, with very little to show for it other than many scandals (including paying millions of dollars in bonus to their incompetent executives even as they file for bankruptcy)!
- ngrilly 2y agoAs far as I know, no executives received “millions of dollars in bonuses”. What is your source? And in Sweden and Europe, people are usually not paid in dollars :)
- mdorazio 2y agoThe first Google result for “Northvolt bonuses”: https://swedenherald.com/article/northvolt-wants-to-pay-out-bonuses-of-59-million https://swedenherald.com/article/northvolt-wants-to-pay-out-...
- ngrilly 2y agoAnd? It is targeting 230 employees, and explicitly excluding top management. Employees at Northvolt are often paid slightly below market, because they also warrants. But considering those warrants are probably not worth much anymore, the bonus may be necessary to retain necessary talents.
- KomoD 2y ago"wants to", meaning they haven't
- abc123abc123 2y agoSince northvolt is private, there is a lot less insight into what goes on there. However, I'm fairly sure that the CEO did sell some of his shares during one or more financing rounds, in order to create a little nest egg for himself. On top of that I'd imagine that during the 8 years or so, he probably took out at least 200k EUR in salary, if not more, per year. So a few millions of dollars probably went to the CEO.
- readthenotes1 2y agoAnother Better Battery Bulletin followup
- magicalhippo 2y agoAlso discussed here[1] a few days ago. [1]: https://news.ycombinator.com/item?id=42210855 https://news.ycombinator.com/item?id=42210855 Sweden's Northvolt files for bankruptcy, in blow to Europe's EV ambitions
- clarionbell 2y agoEurope is entering a crisis of unprecedented proportions. This isn't just an isolated incident, one bad company, this is a trend. It used to be that subsidies managed to balance out the over-regulation, high labor costs and powerful pressure groups Europe was known for. Now it's no longer the case. There used to be a technological edge European countries (especially in the west) could rely on, which made them more suitable for some business. But now it's gone, almost everywhere. Exception is couple of important, but niche industries, which are seen as being of strategic interest (Airbus, ASML, Arianne). But they too feel the pinch now, as the supply chains get more fragile, new talent leaves, or doesn't even show up, and foreign powers prop up their own alternatives. Add incapable, or shortsighted, political leadership, aging population, hostile, or at least unfriendly, neighbors and rising political extremism, and you get a particularly deadly mix. Unfortunately, the top institutions have shown almost zero acceptance of the fact. In that sort of situation the only "hope" is that the collapse will be relatively quick, allowing for some rebuilding to start before the next decade ends. If we are lucky.
- baxtr 2y agoIf Europe as major part of the West continues to fail this is going to happen - Russian influence will rise and dominate at least major parts of Eastern Europe - China will expand its footprint in Africa and increase its ambition in Asia - US and Japan will become more isolated than ever
- oezi 2y agoNothing is going to stop China's rise but China's own failings (mostly demographically). Russia can't even beat a country one third its own size despite petrol dollars and legacy military stock.
- baxtr 2y agoI agree. But Russia is being backed by its Asian allies. They will grind forward albeit slowly.
- DoingIsLearning 2y ago
- throwaway4711 2y agoNV bought manufacturing equipment for $2B from China, now left in the lurch during bring-up, supplier dragging their heels, sending 3rd rate support engineers. Of course, China doesn't want to support a competitor in Europe... Classic rogue state hybrid warfare, just as cut cables in baltic, also by Chinese. Plausible deniability all the way. https://www.newsweek.com/baltic-cable-sabotage-nato-1988689 https://www.newsweek.com/baltic-cable-sabotage-nato-1988689
- blackeyeblitzar 2y agoThis is what I’m seeing in social media elsewhere - reports of difficulty getting good support from Chinese suppliers.
- MrHamburger 2y agoSupport is expensive getting good support from China is generally not possible, because it destroys margins. That is making me very curious about aftermarket of Chinese cars, because they might be cheapish today, but incredibly expensive when you will need to fix them.
- markus_zhang 2y agoI found a post supposedly written by a Chinese supplier of Northvolt. Not sure how true it is though so you need to find some insiders to validate the story. You will need some software to translate the picture into English/other languages. https://imgur.com/AyQYtFj https://imgur.com/AyQYtFj
- csomar 2y agoSo you made a bunch of claims and then linked an unrelated article?
- markvdb 2y agoI also heard this was partly to do with demand moving towards LiFePo4 batteries and their setup being completely unprepared for that.
- rich_sasha 2y agoI'm curious how China makes it work. No doubt they also have dedicated, smart and educated people - I guess no massive shortage of that in Europe either. Central government is often considered to be somewhat corrupt and incompetent, so in any case not hugely better than in Europe. I'm sure there's more know-how, but that came from somewhere too. What is the difference then? Willingness to work for lower wages? Greater determination? State subsidies? It's not like Chinese universities have a great reputation en masse. It's also clearly not IP theft (alone) since they are the leader - who would they steal from? If it's subsidies, then China must be taking the subsidy money from somewhere. It's not, as I understand, a non-social, cutthroat capitalist country. Retirement age is something like 55. Is Chinese hegemony in battery production effectively subsidised by underpaid peasants? But surely the image of guys in sloping hats rolling rice paddies desperately outdated; I don't expect Chinese farming to be behind European in terms of technology. So if it's subsidies, then where is the money coming from, that European governments clearly don't have?
- wkat4242 2y agoIn China people might retire at 55 but there's no government pensions. People's children are their pension. Social welfare is not very great there.
- abc123abc123 2y agoYep. Europe is socialist, which makes it extremelt difficult to start successful tech-companies. Europes unicorns is far fewer than what are created in the US and China. As long as europe continues to heavily regulate and tax its citizens in the best socialist tradition, it will continue its decline, to become a tourist playground in a generation or two, for the rest of the world. I always advice young entrepreneurs to move outside europe to start their companies. In its current form, europe is dead.
- wkat4242 2y agoIt's a lot better place to live than the US though. And we don't need as much. Quality of life is not measured in terms of the amount of stuff you can buy. We don't have to be afraid of getting shot at school or being bankrupted because of an illness. We don't have to pay off our student loans for decades. Income equality is much higher (leading to more public safety and fairness). To many of us this matters more than money. The US has different goals than we do. Europe has never been about maximum profit. Capitalism is a tool to support society, not the end goal.
- TheChaplain 2y agoIt was also reported that Northvolt now wants to pay 59 MSEK in bonuses to 230 employees. Despite firing over 1200 people and with 2.5 BSEK debts to suppliers.
- metalmangler 2y agoThat there is no focus the actual failure, and that is a secondary failure,ongoing. Engineering, production, know what a millwright is? The bros thought they could bluff there way through a parts per billion production line,and just hire people,strut around and go to meetings.Anylise things. Better batteries are made from materials that are known and consistant to parts per billion.The mechanical assembly has to be within microns.Every parameter of temperature and humidity must be known and controlled at every stage. It is a long tradition in some shops, that when the brozecutives show up, they are taken to the maitenence department and allowed to chat with the janitor, but never see the actual shop floor, and never know the difference. Look at boeing to see what happens when the bros think they can optimise, purely engineering descisions, that are already finely tuned. Want to build an engineering company?
- yread 2y agoThere is also this Czech failed battery startup "HE3DA". It went from revolutionary to evolutionary to "well, there is at least one parameter (robustness) that's better than lithium batteries" to "hmm the measurements don't quite match the specs". There were individual investors, big show for opening a factory (with capacity of 1.4GWH we were told; actual batteries sold in 2024: single digit MWhs). Now they fired almost everyone and can't pay their bills https://www.e15.cz/byznys/prumysl-a-energetika/pravda-o-baterkarne-he3da-firma-ma-dluhy-je-na-prodej-ale-kupce-se-ji-najit-nedari-1419261 https://www.e15.cz/byznys/prumysl-a-energetika/pravda-o-bate...
- deleted 2y ago[deleted]