Northvolt goes bust, blames everyone else

Because of course

Northvolt has filed for bankruptcy in Sweden as was expected. They are blaming governments for not giving them enough money. After raising $15 billion over nine years in subsidies and investments from non-government entities. That’s $15 billion down the drain and not a single lesson learned.

“It is a strategic failure. Brussels has sat on the bench and been a witness to this but not done anything about it,” one Northvolt shareholder apparently said, per the FT.

“You will not reach this goal of having a European battery sector if you let private investors purely take financial decisions not based on political goals,” some “battery executive” that the FT didn’t name said.

So, what they are saying, loud and clear, is that the battery industry is completely unviable in Europe unless governments make it viable with lots and lots of money — for how long? Because it certainly hasn’t worked all that well for wind and solar, either. “But China did it,” the industry whines, including Northvolt’s interim chairman Tom Johnstone.

At least Johnstone has had the decency to mention the factor of time in building an industry. “The challenge is this is a very advanced technology, with very advanced manufacturing techniques. It takes a huge amount of money to do it, it takes time to get there. This is a marathon, not a sprint,” he said.

He was talking about a company that tried to open six new factories at the same bloody time as “Ten current and former employees said there were problems with poor management, safety standards and an over-reliance on Chinese machinery.” Yes, it must be the Chinese machinery and not unrealistic plans.

The extent of audacity is a sight to behold. The focus of all the comments is on the lack of enough money, when it’s clear that however many billions governments threw at Northvolt it still wouldn’t make it. Because besides money, building an industry takes time, as demonstrated by China’s dominance. It took them decades to learn to make batteries that are both good and cheap enough to pull down the price of the end product, be it an inverter or an EV. And yet Northvolters thought they could do the same thing in less than 10 years.

“There will be more doubt among investors” now that Northvolt is dead, one commenter said. I say that’s a very good thing. I mean, VW alone had to write off some 661 million euro because it “invested” the money in Northvolt. Everyone who put money into that company lost it. Of course they will think twice before considering a battery investment again. And yet, it’s the government’s fault for not making sure Northvolt survives by guaranteeing its existence with taxpayer money.

This is a most twisted logic that, however, is characteristic of the transition space. The perception that the government owes you not just support, not just all the support it can muster, but all the support you ask for, all the time, forever and ever, has perverted the whole idea of how business is done and what a market economy means. And it’s the governments’ fault as much as the profiteers’. The sooner both sides wake up, the better for everyone. You can cheat in the money department, when you want to build an industry, but you can’t cheat time. Time to admit it.