(Stockholm) The Swedish government has no plans to bail out battery maker Northvolt, which is in dire financial straits amid a slowdown in the electric vehicle market, Prime Minister Ulf Kristersson said on Monday.
“There are no plans for the Swedish state to become a shareholder in Northvolt or anything like that,” Kristersson said at a news conference.
However, he added, “we are committed to making Sweden a good place […] for new technologies needed for the ecological transition” and “for this type of industry”.
“For now, the ball is in the court of the owners of Northvolt,” he added.
PHOTO JESSICA GOW/TT, ASSOCIATED PRESS
Swedish Prime Minister Ulf Kristersson
The Swedish group’s main shareholder is Volkswagen, with 21% of the capital, ahead of Goldman Sachs (19%). Northvolt has obtained financing for 15 billion dollars (20.4 billion Canadian dollars) since its creation in 2016, in the form of equity or loans.
Europe is struggling to compete with China in the production of electric batteries, with 3% of global output, but is aiming for a 25% market share by the end of the decade.
Northvolt is one of the great European hopes in terms of batteries to catch up with the Asian and American giants. But the group has accumulated production delays in recent months.
It announced last week that it was suspending production of cathodes, one of the battery elements, at its giant factory in Skelleftea, northern Sweden.
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In serious financial difficulties, Northvolt also indicated that it would cut jobs without providing figures. The group employs more than 6,500 people.
It also abandoned plans to build another plant in Borlänge, 200 kilometres northwest of Stockholm, where it initially had a cathode materials project.
According to Swedish media, the group is trying to organize a new share issue worth 7.5 billion crowns (nearly one billion Canadian dollars) to overcome its difficulties.