The company, which is struggling to balance its finances, is also said to be talking to investors about longer-term funding arrangements. And while it claims to have made substantial progress in raising cash the future for the battery manufacturer is still very unclear.
According to those involved in the negotiations, the short-term funding could be a mix of pre-orders from customers for batteries and loans, and while not insignificant it is certainly not the $1.5 billion that it was said the company was looking for just a month, or so, ago.
Northvolt is in the process of cutting jobs and its financial woes have certainly raised alarm bells across Europe as it had been seen as Europe's best shot at developing a homegrown electric-vehicle battery champion.
The company has struggled with production problems, sluggish demand and, or course, intense competition from China.
Founded in 2016 to build “the world’s greenest battery”, Northvolt attracted significant investment and orders from the likes of Volkswagen, BMW and Volvo. However, earlier this year BMW cancelled a $2.2bn contract which resulted in Northvolt announcing 1600 job losses.
Talk of bankruptcy has grown and workers are said to be increasingly concerned as they await further redundancy details.
Despite its troubles the Swedish government has ruled out a bailout for Northvolt, but for both the Swedish government and the EU what happens to the company will have major implications. Both are said to be trying to find new backers for the business and talks with the German government have been held – but no financial support was offered.
With money rapidly running out the future of the company is being described as being on a knife-edge and if it was to fail it would highlight the challenges of managing and developing large-scale battery cell production.
Declaring bankruptcy – it has debts of over $4bn – is an option but that could have real implications for other local green businesses that have opened in this part of Sweden.
The company has said that it remains committed to establishing a European industrial base for battery production but what the events of the past few months have starkly shown is that investing in and building these types of factories is no easy matter.
