Seems like Northvolt never really had a product. Can someone please explain why people invest billions in companies that have not sorted out how to build what they want to sell?
Battery cell production alone is massively expensive. The expenses in setting up a production line is counted in the billions.
So the only way to start fresh here is to raise billions in capital. Unless you're Volkswagen or something, when you could invest billions in an enterprise like this one.
Volkswagen has their own plans with its subsidary PowerCo, and since EV adoption is slower than expected, they may (partly) drop Northvolt in favor of PowerCo. Interestingly they canceled their plan for a second battery plant in Germany due to high energy costs.
Regarding Germany: I still do not understand how you want to electrify everything, reduce CO2 emissions, and then shut down fully working nuclear power plants in the middle of an energy supply crisis. This is completely beyond me. I know there are people defending this decision, but I can only attribute this to malice or idiocy.
> I know there are people defending this decision, but I can only attribute this to malice or idiocy.
Import energy from abroad, you get to claim that you're all so Clean and Ecological[0], while all you've done is shift the dirty coal plants to some other countries that don't care and will happily take all the blame in the global statistics, as long as you keep paying them.
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[0] - A claim that's belied by opposition to nuclear energy alone.
> shut down fully working nuclear power plants in the middle of an energy supply crisis
Yes it is a stupid decision, but your timeline is out a little - 2011 is when they decided to shut down the power plants, the energy crisis was 2022. The amount of work that doesnt get done when you are 2/3/4 years from end of life makes reversing the decision on the day of shutdown is not as easy on the ground as it is from an armchair.
Renewables? + some batteries + gas peaker as winter backup
The nuclear plants weren't fully working anymore but taken into planned shutdown 10 years after the decision was made to shut them down. That people think Nuclear is a power technology where you can just nilly-willy decide to continue running is the real idiocy.
Energy prices are now lower than before the run-up to the Russian war of aggression.
Incredibly embarrassing for Europe and Sweden. Even with billions of investments from the big car companies, investors and many millions in subsidies, they simply couldn’t make it work at all. Instead of buying the California startup just to shut it down, should’ve invested most of their money there instead. They are leaving an enormous eyesore in the northern Sweden landscape with thoudands of people unemployed, many of which may be deported now, with very little to show for it other than many scandals (including paying millions of dollars in bonus to their incompetent executives even as they file for bankruptcy)!
This. The system works just as intended. If the state is throwing free money around why wouldn't you pick it up and pocket it? Your job isn't to create jobs or return on investment, it's to funnel state money in the pockets of shareholders.
For those looking for another similar example of european subsidized tech failure check the ST-Ericsson story.
China also subsidizes the car and battery industry and in their case, it seems to be working just fine. So a blanket statement of "state subsidies = bad" does not tell the whole story.
Everyone is subsidizing their industries, especially the US and China.
I never made a blanket statement that all state subsidized are bad, I just pointed out some cases of major EU failures which you took as a blanket statement.
As far as I know, no executives received “millions of dollars in bonuses”. What is your source? And in Sweden and Europe, people are usually not paid in dollars :)
Northvolt's leadership seem extremely incompetent, reading the news here in Sweden the CEO has been lambasted by former employees on how bad he was for executing the plan.
But this happens all the time in the USA, it's quite funny to read comments on HN about how Europe is losing to USA's "innovation" but when one company does follow the USA model (huge injection of capital, unreliable/inexperienced leadership, failure to execute/pivot) then it's an apocalyptic sign. It's risky, and in this case it failed spectacularly.
Comments from insiders in Swedish[1] and Dutch[2]. Some snippets:
... In the end, they are just in a situation that is almost impossible to save. You have a factory full of machines that are substandard in quality, reliability and documentation. A huge 100% in-house tech stack that largely consists of Go pieces on Lambdas writing to DynamoDB. ...
... A gigantic factory full of mediocre Chinese equipment, what can you do with that? They are not standard things, they are things custom made for Northvolt but unfortunately with incomplete specifications. ...
...The whole market is not doing well in Europe. We don't really have the raw materials here (Northvolt's came mostly from China), we don't have the knowledge (that's in Asia) and we don't have the machinery for production. ...
To be fair, the referenced comment (in Dutch) blames management:
> Helaas is het probleem bij Northvolt echt gewoon te herleiden naar slecht management (ex-Tesla), en bijgevolg een slechte keuze van leverancier van productiemachines (Wuxi Lead).
Main equipment manufacture was Wuxi Lead, where naturally everyone speaks almost exclusively Chinese and all docs are in Chinese. Not a problem of course when most customers are also Chinese, much more so when they're European.
He also mentioned they didn't specify certain details when ordering, leaving the Chinese to make choices, and that caused issues yhey had trouble with once delivered.
This might be a culture thing. At least next door here in Norway, a decent supplier will definitely ask when needed, offer suggestions and even resist if you try to order something stupid.
Having a supplier/disti work with you to get the best deal doesn't happen very often. Mostly due to the fact that they could leave money on the table. If you order something with the wrong configuration they can always sell you another thing with the right configuration...
There is also a possibility of cultural differences and who knows what the Chinese thought the Europeans wanted when they did not send complete specs for the equipment. In some countries it is not customary to challenge the client - but I do not know if it applies to China as well.
I've seen how they build stuff in China, and most likely Nothvolt thought it could do some things on their own without understanding what those things would entail. Maybe if they would have asked the supplier to come in and setup the factory and also run the first batches of finished batteries the situation would have been different.
Somehow I think now they're trying to find a scapegoat for the whole debacle and blame on the usual suspects.
If you are spending billions, surely you can bring in some people that speak both Chinese and the local language. Heck, there are even real-time translation services now. No, the problem is not technical, it's that it was a scam from the get go.
You know, the goal of a scam is to make the scammer richer. Who gets richer in this case? No one. So that’s not a scam. I’m disappointed seeing that kind of accusations stated without evidences on HN, a forum about entrepreneurship and tech, where we used to celebrate success as much as learn from failure.
The difference is that Airbus didn't as much build new factories (and certainly not several at the same time) as it is a consortium (and later a unified company) of formerly independent European aerospace companies. E. g. their current German plants, Hamburg (commercial aircraft) and Donauwörth (helicopters) used to belong to MBB (https://en.wikipedia.org/wiki/Messerschmitt-B%C3%B6lkow-Bloh...) and then DASA (https://en.wikipedia.org/wiki/DASA). That's a consolidation similar to what happened in the US, albeit maybe with more "state interference".
I think i read that they could not deliver the quality and quantity expected for automobile production. Bad product, overextension and I won’t be surprised if some graft will show up once they start digging. Norway has another such venture where the executive suite pays themselves handily and delivered nothing.
Northvolt also counted on cheap materials from Russia, e.g. infamously environment unfriendly nickel from Norilsk, which clearly didn't pan out after the 2022 invasion of Ukraine.
This is somewhat true, but I don’t think it is necessarily fair to them. Their strategy was to try to do everything themselves (except raw material mining). By having vertical integration across the battery space, they would be able to hopefully compete on price with the battery giants in China like CATL, while still working out of Europe, which is a lot more expensive in terms of labor costs, and regulation, and everything else. But they didn’t get that far and their biggest customers like BMW started abandoning them while waiting for deliveries to begin. This began the doom spiral. But it is possible that with more money and time this would’ve been the right strategy for the long term competitiveness of the company. Otherwise, if it’s going to be permanently uncompetitive what’s the point? Maybe this was indeed, some kind of scam for government subsidies. But I think it’s more about the difficulty of finding funding to do big things, and to do them properly.
The promise that needed 1 billion in subsidies to build a new plant? As soon as the government got involved it was clear they couldn't be profitable on their own.
Europe is entering a crisis of unprecedented proportions. This isn't just an isolated incident, one bad company, this is a trend. It used to be that subsidies managed to balance out the over-regulation, high labor costs and powerful pressure groups Europe was known for. Now it's no longer the case.
There used to be a technological edge European countries (especially in the west) could rely on, which made them more suitable for some business. But now it's gone, almost everywhere. Exception is couple of important, but niche industries, which are seen as being of strategic interest (Airbus, ASML, Arianne). But they too feel the pinch now, as the supply chains get more fragile, new talent leaves, or doesn't even show up, and foreign powers prop up their own alternatives.
Add incapable, or shortsighted, political leadership, aging population, hostile, or at least unfriendly, neighbors and rising political extremism, and you get a particularly deadly mix.
Unfortunately, the top institutions have shown almost zero acceptance of the fact.
In that sort of situation the only "hope" is that the collapse will be relatively quick, allowing for some rebuilding to start before the next decade ends. If we are lucky.
Sadly but true. The latest issue is that the EC would rather see the auto industry fail than to change its climate objectives. It looks like it gotten so bad that Germany started speaking up against emissions goals and most likely would try to block any measures.
I don't think Arianne is successful as it relies on traditional technology to launch things into space and they can't be competitive with SpaceX.
The EU is the laughing stock of the world: AI regulation is in force, but no single AI company in Europe :)) - just to name one example.
NV bought manufacturing equipment for $2B from China, now left in the lurch during bring-up, supplier dragging their heels, sending 3rd rate support engineers. Of course, China doesn't want to support a competitor in Europe...
Classic rogue state hybrid warfare, just as cut cables in baltic, also by Chinese. Plausible deniability all the way.
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