After one of the most spectacular implosions in recent EU investment history, one has to ask: what went wrong? Northvolt was hailed as the poster child of Europe’s green transition, the flagship of a future built on sustainability and self-sufficiency. And yet, here we are, sifting through the wreckage of a company that promised the world and delivered a cautionary tale.
As I dug into the mess, a troubling pattern emerged—one that’s all too familiar. Northvolt wasn’t just another overhyped startup; it was a masterclass in wishful thinking, unchecked hubris, and an astonishing lack of due diligence from investors who should have known better. The level of blind faith poured into this venture rivals that of FTX, and we all know how that turned out.
This article attempts to dissect what happened, not just to understand the fall of Northvolt but to extract lessons for the future—before we repeat the same mistakes.
Europe’s decarbonization goals
The recent Draghi report lauds the EU’s decarbonization strategies and paints a rosy picture of the battery industry’s “improving outlook.” But let’s cut through the diplomatic niceties. The collapse of Northvolt—a company once hailed as Europe’s battery champion—lays bare the harsh reality: our current strategies are failing. Boasting about patent counts is meaningless when our supply chains are in shambles. It’s one thing to coordinate with established Asian suppliers; it’s an entirely different challenge to build multiple manufacturing plants from scratch, as Northvolt ambitiously attempted. The EU must confront these challenges head-on rather than basking in unwarranted optimism.
The EU’s improving outlook for its battery industry demonstrates that a focused policy effort can succeed, even if non-EU players may benefit most. Although the EU’s market share in lithium-ion batteries globally stands at just 6.5%, battery manufacturing output reached around 65 GWh in 2023 in the EU, growing by around 20% over the previous year. For comparison, the US recorded 80 GWh of production and similar growth, while the figures in China were 670 GWh and 50%, respectively. Public support for battery development has been key to strengthening Europe’s position. Public R&I spending on battery technology has risen by 18% per year on average over the past decade, and Europe ranks only behind Japan and South Korea as a location for patent applications for battery storage technologies.
The future of European competitiveness report. September 2024. EU Comission
Winning the battery technology game
Securing Europe’s battery supply chain isn’t just an uphill battle—it’s a full-blown war, and right now, we’re losing. The battery value chain is a monster, spanning everything from raw materials (lithium, nickel, cobalt, graphite, manganese) to refining, cell manufacturing, system assembly, and recycling. And let’s be clear: Europe isn’t even close to being self-sufficient in any of these areas. Some steps might be achievable in theory, but others? Probably never.
At its core, battery production boils down to three cost drivers: materials, labor, and processing. The first one is a non-starter—half of the world’s raw materials are locked in China’s grip, and an even bigger share of the refined chemicals needed for cathodes and anodes comes from Beijing. Europe could try to compete on the refinement side, but we’re still years away from having the necessary infrastructure (BASFs, AMG, Umicore, Pensana, now-defunct Aurora), and worse, we don’t have the workforce to run it. Skilled labor is expensive, and Europe isn’t exactly teeming with battery engineers ready to step in.
More on Umicore’s Nysa plant in Poland.
Umicore’s Nysa plant in Poland, inaugurated in 2022, stands as Europe’s first cathode materials gigafactory, aiming for carbon-neutral production by utilizing 100% renewable energy. While specific details about the involvement of Chinese suppliers in this facility are not publicly disclosed, Umicore’s global operations include partnerships with Chinese entities, such as a supply agreement with Ganfeng Lithium Co., Ltd., to source lithium for its battery materials. In 2019, Umicore entered into a multi-year strategic supply agreement with LG Chem for NMC (Nickel Manganese Cobalt) cathode materials, with supplies originating from Umicore’s plants in Poland, Korea, and China. Additionally, Umicore has a joint venture with Jiangmen ChangXin Surface Technology in China, focusing on metal deposition solutions. These collaborations indicate that Umicore engages with Asian suppliers in various aspects of its global operations.
Processing is another beast. It’s energy-intensive and costly. The EU is ramping up renewables, sure, but stable energy supply at scale? Still a distant dream. Meanwhile, China isn’t just building renewables at breakneck speed; they’re also leading the charge on 4th-gen nuclear reactors, securing an energy advantage we can’t match. This aggressive growth contrasts with Europe’s stagnation; investment in the EU’s energy transition fell by 6.5% in 2024, hindered by policy uncertainties and infrastructure challenges.
If Europe wants to stand a chance, we need cheaper and more stable energy prices, higher yields from top-tier talent and cutting-edge machines, aggressive automation to slash labor costs, and breakthrough innovations in material refinement. Can we do it? Yes. But that would require a level of strategic planning we simply don’t see. Right now, it’s all cash and wishful thinking—no grand strategy tying together political backing, workforce development, industrial automation, recycling, and supply chain logistics.
Another way out? Reinvent the chemistry. The EU has gone all-in on lithium-ion and Lithium Iron Phosphate (LFP), mostly following China’s lead. Northvolt tried pushing sodium-ion, but let’s be honest—China’s battery titans like CATL and BYD are already miles ahead. Solid-state? Graphene? Silicon? Hydrogen? Metal-air? All promising, but none anywhere near large-scale commercial deployment.
So where does that leave us? Staring at an inconvenient truth: Europe’s battery ambitions are running on fumes, and unless something changes—fast—we’re just setting ourselves up for another Northvolt-sized wake-up call.
The inception of Northvolt
In 2015, two former Tesla executives, Peter Carlsson and Paolo Cerruti, launched a bold project named SGF Energy. Their vision? To build Europe’s first sustainable lithium-ion battery company. A year later, they rebranded as Northvolt. But there’s more to the inception story than the standard “former Tesla execs start a gigafactory” narrative.
One of the key players behind Northvolt’s rise wasn’t a group of Silicon Valley veterans or a big European automaker—it was Vargas Holding, a Swedish investment firm with a very particular way of doing business. Harald Mix and Carl-Erik Lagercrantz, the duo behind Vargas, aren’t your typical financiers. They don’t just write checks; they build companies from scratch, taking a hands-on approach to validating, funding, and scaling businesses in sustainability. Their stated goal? Decarbonizing 1% of global emissions.
Vargas Holding’s involvement with Northvolt didn’t happen by accident. They were already deep into battery tech, having backed Polarium, a leading energy storage company. When Polarium needed a steady supply of lithium-ion cells, Vargas spotted a bigger opportunity: why not build the supplier themselves? That idea led to the co-founding of Northvolt in 2016. Not only did Vargas provide the initial capital, but they also delivered something far more valuable—connections, guidance, and, crucially, early customers. Carl-Erik Lagercrantz, one of Vargas’ co-founders, still sits as Northvolt’s Vice Chairman, underscoring how intertwined the two companies are.
Now, here’s the question: Would Northvolt have lasted this long without Vargas’ backing?
Mix and Lagercrantz didn’t just provide funding. They supplied a strategic blueprint, one that became Northvolt’s own playbook. Vargas’ entire model revolves around a “greenfield approach”—building massive industrial ventures from the ground up. This lets them control margins and integrate sustainability into every part of the value chain. It’s an ambitious, capital-intensive approach that targets high-emission industries to break their dependence on fossil fuels.
That’s the theory, at least.
In practice, I wonder if Northvolt’s downfall was inevitable. Like many European sustainability ventures, it ran headfirst into a brutal reality: China doesn’t just lead the battery industry—it owns it. There’s a systematic blindness in Europe regarding recognizing how dominant China is in certain industrial verticals. Competing head-on in battery production, where China has decades of experience, entrenched supply chains, and government-backed industrial policy, was always going to be an uphill battle.
Europe absolutely has the potential to lead in decarbonization. But it won’t happen by throwing money at the problem and hoping for the best. It’ll take hard-nosed strategic planning, long-term industrial policy, and an honest assessment of where we can realistically compete.
Northvolt was a test case. And if this is the result, maybe it’s time we rethink our playbook.
Vargas Holding’s Portfolio Companies
Vargas Holding’s portfolio includes a diverse range of companies focused on sustainable solutions across various sectors, including green batteries, energy storage, steel, hydrogen, home energy technology, and textiles 7. Some of their notable investments include:
| Company | Year Founded | Industry | Description |
|---|---|---|---|
| Polarium | 2015 | Energy Storage Solutions | A leading provider of energy storage solutions, offering sustainable and reliable energy storage systems for various applications. |
| Northvolt | 2016 | Battery Manufacturing | A battery manufacturer focused on developing and producing the world’s greenest battery cells and systems with a minimal carbon footprint. |
| Stegra (formerly H2 Green Steel) | 2021 | Green Steel Production | A company revolutionizing the steel industry by producing green steel with a significantly reduced carbon footprint compared to traditional methods. |
| Aira | 2024 | Home Energy Technology | A company developing innovative home energy technology solutions to empower homeowners to manage and optimize their energy consumption. |
| Syre | 2023 | Sustainable Textiles | A company focused on decarbonizing the textile industry by developing and producing sustainable textile solutions. |
| Accessbolaget | 2021 | Telecommunications | A telecommunications service provider. |
| Allicon | 2019 | Internet Services | An internet service provider. |
| Plexigrid | 2023 | Energy Marketing | A company involved in energy marketing and trading. |
In addition to these, Vargas Holding has also made investments in Volvo Group.
Northvolt’s strategy
So, Northvolt’s entire strategy was built on Vargas’ playbook—scalable green energy cells, initially to service Polarium’s needs. That meant producing lithium-ion cells but doing it in the greenest way possible. The challenge? Battery competitiveness is ruled by three things: materials, labor, and processing. And of those, processing costs dictated most of Northvolt’s strategic decisions.
Step one was picking a location with abundant renewable energy. That’s why in 2017, they announced Northvolt Ett in Skellefteå, Sweden, a gigafactory designed to eventually reach 60 GWh in annual production. But before that, they had a more immediate goal—16 GWh by 2024. Construction started in 2017, and after multiple delays, they finally assembled their first lithium-ion battery cell in December 2021. The facility was supposed to cover everything—manufacturing active materials, cell assembly, and even battery recycling.
By 2023, Northvolt Ett achieved 99% fossil-free production, running mostly on hydropower. But for all the hype, the actual production numbers were a disaster. The plant was supposed to hit full production capacity by 2023. Instead, by Q3 of that year, it had delivered just 79.8 MWh of battery cells—less than 0.5% of its planned annual capacity. By late 2024, they were barely scraping past 1 GWh.
So, what went wrong?
1. The People Problem: No Skilled Workforce, No Production
Building a battery factory is one thing. Staffing it with people who know how to run it? A completely different beast. Europe doesn’t have a deep talent pool for battery production. It takes time and expertise to build a competent workforce, and that’s not something you can just fix by throwing money at the problem. Training takes time. Lower yields are inevitable.
Northvolt’s response? Import talent from Asia—mostly South Korea and China. That came with its own set of problems. Bringing together Swedish, Korean, and Chinese workers in a remote Arctic town? A culture clash of epic proportions. The results were predictable—high defect rates, safety failures, and a brutal churn rate among employees. Several fatal accidents occurred due to missing safety procedures. Production waste skyrocketed. Costs followed.
2. The Machines: Made in Asia, Lost in Translation
Northvolt quickly realized another problem: they didn’t have the right equipment. Their ambitious green gigafactory wasn’t actually equipped to mass-produce energy cells. The solution? Import high-end production lines from China and South Korea. They partnered with Wuxi Lead Intelligent Equipment, a Chinese supplier, to kit out the factory.
That’s when things got messy. The machinery wasn’t calibrated for Northvolt’s processes, the software interfaces were in Chinese, and fine-tuning required expertise they didn’t have. The result? More delays, more inefficiencies, and even higher costs.
3. The Supply Chain Fantasy: The Green Bottleneck
Northvolt also faced another harsh reality—securing green raw materials at scale wasn’t possible. They insisted on sourcing lithium, cobalt, and other key materials from sustainable, recycled sources. The problem? That supply chain doesn’t exist at scale.
The outcome was predictable: production halts, skyrocketing costs, and last-minute scrambles for alternative suppliers. Eventually, Northvolt gave in and turned to Asia—importing thousands of tonnes of pre-made cathode materials from China. At least 3,100 tonnes of lithium-nickel-manganese-cobalt oxide (NMC) were shipped from Chinese suppliers to Sweden. They also struck a long-term deal with China’s Tianqi Lithium Industries to secure lithium hydroxide from 2020 to 2025.
At the end of the day, they did exactly what they were trying to avoid—relying on Asia. Which, if we’re being honest, is exactly what Carlsson and Cerruti had been doing at Tesla anyway. The difference? Tesla had the margins, supply chains, and market positioning to make it work. Northvolt didn’t.
And so, the costs ballooned. The deadlines slipped. The grand vision of a European battery powerhouse began to crumble under its own weight.
Asian Equipment and Component Suppliers
Northvolt’s ambitious push for European battery independence was heavily reliant on Asian suppliers for both equipment and materials. While the company aimed to build a local supply chain, many critical components were sourced from China and South Korea, with some suppliers even establishing operations in Europe to accommodate Northvolt’s needs.
Chinese Suppliers:
- Wuxi Lead Intelligent Equipment. Northvolt’s primary supplier of battery manufacturing machinery. There were also allegations of limited knowledge transfer and potential safety hazards.
- Kedali Industry. Provided square battery cases under a supply deal with Northvolt. Kedali set up a subsidiary in Sweden to secure the contract to ensure a stable supply.
- Shenzhen Senior Technology Material. Contracted to supply lithium-ion battery separators, with plans to build a plant in Sweden dedicated to meeting Northvolt’s demand.
- Shenzhen Capchem Technology Co., Ltd. Supplied electrolytes to Northvolt under a contract valued at approximately $175 million.
- Hunan Changyuan Lico Co., Ltd. One of Northvolt’s cathode material suppliers.
South Korean Suppliers:
- Dongjin Semichem. Supplied anode materials.
- Iljin Materials. Supplied copper foils for battery production.
- SK Nexilis. Another copper foil supplier, with production based in Poland. In 2024, SK Nexilis signed a 5-year supply agreement with Northvolt.
- L&F. Provided cathode materials for Northvolt’s battery production.
- CIS. Originally contracted to supply electrode manufacturing machines, but the agreement was modified due to Northvolt’s financial struggles.
- Enchem. Considered as a potential supplier of electrolyte solutions.
- SKIET. A potential supplier of battery separators.
While Northvolt positioned itself as a European leader in green battery production, its reliance on Chinese and South Korean suppliers raised questions about supply chain resilience, knowledge transfer, and long-term sustainability.
Northvolt’s survival strategy
Diversification
As Northvolt’s struggles in Skellefteå became clear, the management team scrambled to plug the gaps. The answer? Diversification. Instead of relying solely on EV batteries—where China dominated—they pivoted toward grid-scale energy storage and industrial applications, a sector with higher margins, lower volume needs, and more potential for integration-based value capture.
Their first move was Northvolt Dwa in Gdańsk, Poland, established in 2019. This facility focused on assembling battery modules and packs for industrial and energy storage applications. Poland’s logistics, proximity to key European markets, and lower labor costs made it an attractive location. Like Northvolt Ett, the factory was powered by renewables, in this case, Polenergia’s wind farms.
A year later, Northvolt doubled down on this strategy by launching the Voltpack family. If the name sounds familiar, it’s because it’s Tesla’s playbook all over again.
- Voltpack Core: A modular lithium-ion system aimed at replacing diesel engines in industrial settings.
- Voltpack Mobile System: A scalable energy storage solution designed for rapid deployment, offering a clean alternative to diesel generators.
To push this, Northvolt partnered with Vattenfall, a major European energy player, ensuring credibility and market access.
More Factories, More Debt
By 2022, Northvolt announced Northvolt Drei (Northvolt Three) in Heide, Germany—a 60 GWh gigafactory meant to support Europe’s growing EV and energy storage demand. The project was heavily subsidized, securing €902 million in state aid in early 2024. This wasn’t just an industrial strategy; it was survival. The more subsidies they secured, the longer they could keep going.
Client Hunt: Volvo, BMW & Polarium
Securing major clients was crucial for Northvolt’s fundraising ability. The 2021 joint venture with Volvo Cars (owned by the Chinese holding Geely), called Novo Energy, gave them a foothold in the auto sector. The deal included a research center (operational in 2022) and a gigafactory in Gothenburg (planned for 2025) to produce batteries tailored for Volvo and Polestar.
However, the real trophy contract came earlier, in July 2020, when BMW signed a €2 billion supply agreement with Northvolt. The deal stipulated that battery cells would be produced at Northvolt Ett starting in 2024—with a critical condition: Northvolt had to manufacture the cells exclusively using renewable energy. The BMW contract wasn’t just about securing a buyer; it was an early bet on Northvolt’s green credibility, reinforcing its claim as Europe’s sustainable battery leader.
That same year, they made an obvious but strategic partnership with Polarium, one of Northvolt’s original backers. Under the agreement, Northvolt supplied lithium-ion battery cells from Skellefteå to Polarium’s energy storage solutions. This wasn’t a surprise—Polarium’s leadership (Vargas Holding) was deeply entangled with Northvolt from the beginning.
Vertical Integration: Choking the Choke Points
Realizing that supply chain constraints could cripple them, Northvolt tried to vertically integrate through two key ventures:
- Aurora Project (2021, with Galp) – A lithium hydroxide conversion plant in Setúbal, Portugal, projected to produce 35,000 tons annually by 2026. This was an attempt to secure lithium refining capacity within Europe.
- Hydrovolt (2020, with Hydro) – A battery recycling plant in Norway, designed to recover secondary raw materials and reduce dependence on Asia.
Both moves aimed at bypassing Chinese suppliers and creating a greener, local supply chain. The reality? These projects would take years to scale while Northvolt continued to bleed cash.
Burning Through Billions
Between 2020 and 2023, Northvolt frantically diversified—expanding its product lines, client base, and supply chain options. But the real story? They were still struggling to increase quality and yield while burning through billions in VC money and public debt. The strategy bought time, but not profitability.
Northvolt Fundraising Timeline & Key Investors
Series A
- Year: 2017
- Amount: $13.3 million
- Main Investors: Vattenfall, Vinnova, Swedish Energy Agency, Stena
- Use of Funds: Initiate the development of battery production capabilities.
Series B
- Year: 2019
- Amount: $1.02 billion (Some sources report $1 billion)
- Main Investors: Volkswagen Group, Goldman Sachs, BMW Group, Folksam, IMAS Foundation
- Use of Funds: Construction of Northvolt Ett gigafactory in Skellefteå, Sweden.
Debt Financing
- Year: 2020
- Amount: $1.6 billion
- Main Investors: KfW, European Investment Bank, Danske Bank, The Export-Import Bank of Korea, BNP Paribas
- Use of Funds: Factory expansion.
Series C (First Round)
- Year: 2020
- Amount: $600 million
- Main Investors: Goldman Sachs, Volkswagen, Baillie Gifford, Baron Funds, Scania, Daniel Ek, Norrsken VC
- Use of Funds: Expansion of production capacity and development of battery recycling capabilities.
Series C (Second Round)
- Year: 2021
- Amount: $2.75 billion
- Main Investors: OMERS Capital Markets, Goldman Sachs, Fjärde AP-fonden, AP3, Första AP-fonden, Second AP Fund, Volkswagen Group, EIT InnoEnergy, Bridford Group, AMF, ATP, Baillie Gifford, Baron Funds
- Use of Funds: Scaling up battery manufacturing and supporting new facility developments.
Convertible Loan
- Year: 2022
- Amount: $1.1 billion
- Main Investors: Ava, AMF, Baillie Gifford, Folksam, PCS Holding, Swedbank, TM Capital, Volkswagen Group, OMERS Capital Markets, Olympia Group, IMAS Foundation, Goldman Sachs Asset Management, Fondaco Group
- Use of Funds: Enhancing production capabilities and supporting European expansion.
Series D
- Year: 2023
- Amount: $1.2 billion
- Main Investors: IMCO, BlackRock, CPP Investments, OMERS
- Use of Funds: Financing European and North American expansion plans.
Conventional Debt
- Year: 2024
- Amount: $5 billion
- Main Investors: Undisclosed lenders
- Use of Funds: Expansion of the Northvolt Ett gigafactory in northern Sweden.
The Delusion of Due Diligence
One of the most baffling aspects of this entire saga is the sheer number and diversity of investors who poured billions into Northvolt—without a shred of serious due diligence. What exactly happened in those board meetings? How did no one, especially institutional investors, flag the conflicts of interest, the wildly overambitious targets, or the catastrophic strategic missteps?
For a company claiming to revolutionize green energy cells, Northvolt’s leadership team lacked one crucial thing—actual experience. Not a single senior executive had built a battery factory before, let alone a competitive cell manufacturing business. And yet, investors—some of them state-backed—acted as if capital alone would solve the engineering and supply chain hurdles that even seasoned players struggle with.
This was a textbook case of wishful thinking. Many of Northvolt’s biggest backers, particularly public investors, didn’t understand the brutal reality of the battery supply chain and instead assumed they could reshape the industry by sheer force of will. But deep tech doesn’t work like that. You don’t outpace decades of entrenched expertise by throwing money at a problem and hoping for the best.
And now, the reckoning has arrived.
Volkswagen’s Billion-Euro Blunder
Among the major investors, strategic partners, and boardroom power players, Volkswagen stood at the center of it all. Their influence within Northvolt was considerable, shaping key decisions and doubling down on funding at every turn. And yet, here we are. Taking strategic orders from a car manufacturer sidelined by China and now in full panic mode doesn’t seem like the wisest move.
The Money Pit: Billions Poured In
- 2019: Volkswagen jumped in early with a €900 million investment, securing a 20% stake and a board seat. This was part of Northvolt’s Series B funding round—a deal they probably regret now.
- Over time: They doubled down, throwing in an additional €500 million, pushing their stake to 21% as of November 2024.
- They kept pouring in cash, participating in Series C (2020), Series C (2021), and the 2022 convertible loan.
The Joint Venture That Went Nowhere
- In an attempt to secure battery supply for their EV future, Volkswagen set up Northvolt Zwei, a 50/50 joint venture to build a 16 GWh battery factory in Salzgitter, Germany.
- The goal? Start production by 2023–2024. The reality? It’s another casualty of Northvolt’s implosion.
Trying to Hedge Their Bets
- Volkswagen, through its battery subsidiary PowerCo, realized that putting all their eggs in the Northvolt basket was too risky.
- July 2024: PowerCo struck a landmark licensing deal with QuantumScape to mass-produce solid-state batteries—up to 40 GWh per year, with the option to scale to 80 GWh.
- December 2024: PowerCo invested C$69 million (US$48M) in Patriot Battery Metals, securing a 9.9% stake and a 10-year lithium offtake agreement from their Quebec mine.
The Fallout: Volkswagen’s Battery Mess
- Volkswagen was supposed to be Northvolt’s biggest customer—but with production failures, delays, and Northvolt’s bankruptcy, that plan is dead in the water.
- As Northvolt spirals, Volkswagen is left scrambling to secure alternative battery supplies for its EV ambitions.
- Despite the billions lost, Volkswagen isn’t backing away from batteries—but their Northvolt bet turned out to be one of their biggest miscalculations.
The Takeaway: Another Costly Lesson for Volkswagen
Volkswagen’s Northvolt disaster is a brutal case study in how legacy automakers continue to struggle with deep tech investments. They thought they were securing Europe’s EV future—instead, they bankrolled a financial black hole.
Northvolt: The Collapse in Real Time
Northvolt is in a financial freefall. In November 2024, the company filed for Chapter 11 bankruptcy in the U.S., with $5.8 billion in debt and just $30 million in cash. Losses hit SEK 11 billion (€950 million) in just the first nine months of 2023. They’re scrambling to raise $1.3 billion to stay afloat, securing short-term financing just to keep the lights on.
Yet, despite the bankruptcy, operations are still running—at least for now.
- Northvolt Ett (Sweden): Struggling to scale, producing just 79.8 MWh in 2023—less than 0.5% of its planned annual output.
- Northvolt Dwa (Poland): Still assembling battery modules, but in need of outside investment to continue.
- Northvolt Drei (Germany): On hold.
- Northvolt Six (Canada): Under construction, but delayed.
- Novo Energy (Volvo JV): Acquired by Volvo.
Their much-hyped vertical integration strategy? Falling apart.
- Hydrovolt (battery recycling JV with Hydro)? Divested.
- Aurora Project (lithium refining JV with Galp)? Withdrawn.
The company has slashed jobs, cut projects, and is desperately looking for new investors to finance what remains. The demand for EV batteries isn’t growing as fast as expected, competition is brutal, and Northvolt simply isn’t delivering.
To cap it off, CEO Peter Carlsson has stepped down, with co-founder Paolo Cerruti also leaving his leadership post in North America.
What started as Europe’s great battery hope is now a financial and operational wreck. The lesson? Grand visions don’t replace execution. And in deep tech, reality always catches up.
The Need for Smarter Deep Tech Investing
Despite the spectacular failure of Northvolt, I remain a believer in bold, ambitious deep tech projects. The vision was grand, and that’s exactly the kind of thinking we need. But if there’s one thing this saga proves, it’s that grand visions alone aren’t enough. A project of this scale required far more strategic oversight, rigorous due diligence, and operational expertise.
Europe is more than capable of leading Deep Tech innovation at scale. The problem? We still lack the investment discipline and operational experience to execute these projects. The focus isn’t just on writing bigger checks—it’s about understanding the brutal realities of scaling hardware, mastering supply chains, and ensuring the right technical expertise is in place before breaking ground.
Deep Tech isn’t a consumer app where you tweak code and ship updates overnight. This is fundamental science, large-scale industrial operations, logistics, and a workforce that needs years of training. If we truly want to build a European deep tech powerhouse, our due diligence has to improve—not to kill deals, but to expose critical gaps before they spiral into billion-dollar implosions.
The SoftBank of Sustainability?
In many ways, Vargas Holding feels like a sustainability-focused version of SoftBank—big checks, big bets, and questionable execution. Like Northvolt, their other ventures, H2 Green Steel and Polarium, also deserve scrutiny.
Take Polarium, for example. The company hit severe turbulence in 2023:
- Revenue collapsed by 48% year-over-year.
- Margins were squeezed.
- High inventory levels signaled operational mismanagement.
- Polarium is now restructuring, raising questions about its long-term viability.
This isn’t about being cynical—it’s about being realistic. These projects matter. They deserve funding. But they also deserve better planning, tighter execution, and more transparency.
Europe’s Deep Tech Future: More Control, Less Hype
If Europe is serious about regaining control of critical supply chains, it needs more than just massive capital injections and lofty political speeches. We need better coordination, clearer KPIs, and data-driven decision-making.
It’s fantastic that we want to bring supply chains back home. But it’s delusional to expect that to happen in five years. This isn’t a sprint—it’s a long-term strategic effort that requires patience, discipline, and a brutal honesty about what’s possible.
We must invest. We must push. But we need to do it with more control, more transparency, and a hell of a lot less fanfare.
Northvolt Timeline
2015
Northvolt is founded as SGF Energy by former Tesla executives Peter Carlsson and Paolo Cerruti, aiming to establish a sustainable battery industry in Europe.
2017
The company rebrands as Northvolt.
Northvolt announces plans to build its first gigafactory, Northvolt Ett, in Skellefteå, Sweden.
Construction of Northvolt Labs begins in Västerås, Sweden, focusing on research and development.
2019
Northvolt Labs in Västerås becomes operational, emphasizing R&D, cell industrialization, and pilot-scale battery recycling.
Northvolt establishes Northvolt Dwa in Gdańsk, Poland, to develop complete battery solutions for industrial and energy storage markets.
The company secures a $1 billion equity capital raise, with Volkswagen and Goldman Sachs as key investors.
Volkswagen invests €900 million, obtaining a 20% stake in Northvolt and a seat on the board.
2020
Northvolt raises $1.6 billion in debt financing to support factory expansion.
The company secures a $600 million funding round, including investments from Goldman Sachs, Baillie Gifford, Norrsken Foundation, and others.
2021
Northvolt announces energy storage solutions with Vattenfall, including Voltpack Core and Voltpack Mobile System.
The company raises $2.75 billion through a private placement to expand battery cell and cathode material production and support recycling initiatives.
The company partners with Polarium to offer energy storage for telecom networks built on Northvolt’s green battery cells.
Northvolt Ett in Skellefteå begins production, assembling its first lithium-ion battery cell in December.
2022
Northvolt announces plans to build Northvolt Drei in Heide, Germany, aiming for a production capacity of about 60 GWh per year.
The company established a joint venture with Volvo Cars, named Novo Energy, to build a new lithium-ion battery factory near Gothenburg, Sweden, with production scheduled to start in 2025.
Northvolt secures a $1.1 billion convertible loan to further its expansion efforts.
2023
Northvolt raises $1.2 billion amid plans to open a battery plant in Canada.
A classified interim report reveals that the company experienced a net loss of about $1 billion (SEK 11 billion) in the first nine months of 2023.
Northvolt begins construction of Northvolt Six near Montreal, Quebec, Canada, with initial production intended to start in 2026.
2024
Northvolt announces extensive staff reductions, affecting 1,600 employees, and discontinues the expansion of Northvolt Ett.
Volvo Cars invoked its redemption rights to acquire Northvolt’s shares in Novo Energy, citing unmet financing obligations.
Northvolt filed for Chapter 11 bankruptcy protection in the U.S. on November 21, reporting $5.8 billion in debt and $30 million in cash.
Co-founder and CEO Peter Carlsson resigns following the bankruptcy filing.
2025
• In January, Northvolt sells its remaining stake in battery recycler Hydrovolt to Norsk Hydro for 78 million Norwegian crowns.
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