Liquidity crisis | The task becomes more complicated for Northvolt

After the cancellation of a multi-billion order last June, the German giant BMW, one of Northvolt’s major shareholders, is refusing to reinject money into the company. At the heart of a liquidity crisis, the young company also sees a financing guarantee ending up on ice.

According to Bloomberg, the automaker has remained on the sidelines as part of the Swedish battery cell maker’s efforts for its trunks. BWM holds an approximately 3% stake in Northvolt.

This decision by BMW contrasts with the exit made last month by Volkswagen, Northvolt’s largest shareholder, with a 20% stake.

“We are in close contact with [la compagnie] and support the industrial ramp-up of existing production lines,” Volkswagen said, adding that it had no intention of abandoning the Swedish manufacturer.

BMW canceled an order worth around CAN 3 billion last June because Northvolt would not have been able to meet the terms of a contract entered into in 2020 for the supply of battery cells – the last step before the assembly of lithium-ion batteries.

The Stockholm-based company, which is planning a 7 billion battery cell mega-factory on the South Shore of Montreal, is making more painful decisions after admitting, last July, that it no longer had the kidneys strong to support its current business model.

It refocused its strategy on the production of battery cells, unplugged a major project in Sweden in addition to laying off 1,600 people, almost a quarter of its global workforce. Northvolt also put the brakes on the expansion of its Skellefteå complex, considered its backbone.

This slowdown in northern Sweden is accompanied by new repercussions, according to the Reuters agency.

To finance the expansion of its Swedish mega-factory, Northvolt was able to obtain financing of 5 billion US dollars with a group of lenders at the start of the year. The lenders had received guarantees of around US$1.5 billion from the Swedish government.

This promise no longer seems to be kept, according to the Swedish organization which manages the debt of this Scandinavian country.

“The company announced that its expansion was suspended,” said its general director Karolina Ekholm, in a statement to Reuters. Guarantees are only valid if the conditions of the original agreement are respected. »

In Quebec we are still waiting to know the impact of the strategic review at Northvolt on its site which straddles Saint-Basile-le-Grand and McMasterville, in Montérégie. The Press has already revealed that the commissioning of the plant, scheduled for 2027, would be postponed. The delay could reach up to 18 months, according to the Legault government.