Northvolt, a Swedish maker of lithium-ion batteries that once was valued by venture capitalists at nearly $12 billion, has filed for bankruptcy.
Why it matters This is a massive blow to Europe's EV manufacturing goals, as Northvolt was viewed as the best homegrown chance for reducing reliance on China.
By the numbers: Northvolt had raised over $6 billion in equity funding since 2017, from a large investor group that included Goldman Sachs, Baillie Gifford, IKEA, Siemens, Baron Funds, and AP-fonden. Plus automakers like BMW and Volkswagen.
It also took on billions of dollars in debt.
The bottom line: Northvolt isn't dead yet, as its restructuring plan includes $245 million in new financing. But its equity backers are wiped out, and the episode could cause European automakers — and maybe some U.S. automakers — to further perseverate on the largescale transition to EVs.
And another: Norwegian aluminium Norsk Hydro ASA will halt funding for its battery and green hydrogen businesses and phase them out over time due to challenging market conditions.
...and when I told you 7 months ago that the macro conditions are negative for the lithium sector and will remain so in protracted winter hibernation, you shrugged it off.
...I'd rather be in BTC right now than in lithium, crazy as it sounds. Cheaper gets cheaper, while in market cap terms BTC is not a longer term bubble if it is allowed to become mainstream- and the Elon-Trump victory has been a game changer.
