Northvolt crisis: billions in losses and an uncertain future in Germany!

Northvolt crisis: billions in losses and an uncertain future in Germany!

What's going on in battery production? The concerns about Northvolt, once celebrated as the manufacturer of the “greenest battery in the world”, are taking on dramatic proportions. The Swedish battery company filed for bankruptcy in March 2025 and is on the brink of a crisis that could also have significant financial impacts on Germany. Peter Carlsson, CEO of Northvolt, presented the current status and challenges of the industry during a start-up trade fair in Berlin. Times have become tougher across the European battery market and companies have to work even harder to survive in this highly competitive industry.

The problems for Northvolt have now reached a dimension that has also brought the federal government into action. Hundreds of millions of euros of German tax money appear to be lost, while Schleswig-Holstein guarantees half of a KfW financing of 600 million euros. In the worst case, this could mean that the federal state could lose up to 300 million euros. According to information from ndr.de, Northvolt has already initiated restructuring proceedings in order to rescue itself from financial difficulties.

Investments are on the brink

The ambitious plans for the “Northvolt Drei” battery factory in Heide, which is estimated to cost 4.5 billion euros, are up in the air. Even though an insolvency administrator in Stockholm is looking for potential investors, the future use of the site remains uncertain. Northvolt's goal has always been to reduce dependence on Asian manufacturers and advance European battery production, but the reality is different. The pressure on start-ups in this industry is enormous, and many projects are now being reduced or even discontinued, as enomyc.com notes.

European demand for batteries has risen sharply, particularly due to the booming e-mobility. An increase of 25 percent to over 17 million electric vehicles is expected as early as 2024. However, many companies, including Northvolt, are struggling to improve their availability and production capabilities. Northvolt's French subsidiary is currently not insolvent, but doubts about the Heide location are increasing. This can be attributed not least to the high reject rates and the dependence on Asian know-how, which affect industrial manufacturing capabilities.

The future of batteries in Europe

Despite the current difficulties, capital.de sees a long-term need for powerful batteries in Europe. Companies have to reorient themselves in order to secure their market shares. Crisis management strategies include opening up new markets, exploiting technological advances and strengthening structural resilience. In short, it's time for companies to show their skills and adapt to play a role in the battery manufacturing race.

In the current tense situation, it is crucial that the local industry learns from this debacle and rethinks its strategy. The risks involved are high, and the development of the battery market could be important not only for companies like Northvolt, but for the entire future of energy supply in Europe.