Northvolt’s fate teaches Europe a lesson: stick to what you’re good at

{"text":[[{"start":8.98,"text":"And so farewell to Northvolt. "},{"start":11.247,"text":"The European battery maker’s bankruptcy filing in Sweden has dealt a heavy blow to the continent’s hopes of developing a homegrown electric vehicle battery maker capable of even denting the market dominance of Asian rivals, such as China’s CATL. "},{"start":23.464,"text":"The lesson, for Europe, should be to back those green technologies where it already has an advantage. "}],[{"start":29.46,"text":"The events of this week have a sense of inevitability. "},{"start":32.527,"text":"What was once Europe’s best-funded start-up had already filed for Chapter 11 bankruptcy in the US last year. "},{"start":38.307,"text":"Northvolt had been hoping to secure $1bn to keep its only existing plant running, in Skellefteå in its home country of Sweden. "},{"start":45.612,"text":"That seemed a tall order. "},{"start":47.153999999999996,"text":"A court-appointed trustee will now sell its assets. "}],[{"start":51.14,"text":"Northvolt is not the only battery maker in Europe, or elsewhere, that has failed, of course. "},{"start":57.082,"text":"The UK’s great battery hope, Britishvolt, was another high profile casualty in 2023. "},{"start":63.062,"text":"Battery manufacturing is a highly capital intensive, highly technical industry. "},{"start":67.70400000000001,"text":"Recent weaker-than-expected EV sales have also made investors jittery about the market’s prospects. "},{"start":72.97200000000001,"text":"A slew of individual projects have consequently been cancelled or delayed. "}],[{"start":77.93,"text":"The EV battery market is not the only green industry where Europe has struggled to compete against the might of China. "},{"start":83.80900000000001,"text":"Just witness the plight of Europe’s solar cell manufacturers. "}],[{"start":null,"text":"

"}],[{"start":88.07000000000001,"text":"But Northvolt’s struggles have also been homegrown. "},{"start":91.11200000000001,"text":"Yes, it had raised around $15bn in equity, debt and government funding since its inception in 2016. "},{"start":97.792,"text":"But ultimately this proved no match for its overblown ambition. "},{"start":101.23400000000001,"text":"It not only wanted to produce EV batteries, but the cathodes that go into batteries and energy storage. "},{"start":106.727,"text":"It was also involved in battery recycling. "}],[{"start":110.37,"text":"Northvolt’s bankruptcy raises a legitimate question over whether Europe can still — or should even try to — create a domestic battery champion. "},{"start":118.19900000000001,"text":"Chinese and Korean players dominate nearly 99 per cent of car battery sales in the EU, on International Energy Agency numbers. "}],[{"start":126.67,"text":"This is not the end, though. "},{"start":129.012,"text":"There are still nine domestic companies in the mix, according to CRU Group. "},{"start":133.304,"text":"These include starts-up such as France’s Verkor. "},{"start":136.234,"text":"Others are owned by European carmakers — Volkswagen’s PowerCo for instance. "},{"start":140.889,"text":"Many could still carve out a niche for themselves in the market by aiming small in the first place and scaling up. "},{"start":146.43200000000002,"text":"Partnering with Chinese or Korean battery makers is another route. "}],[{"start":151.09,"text":"But the greater lesson from Northvolt for European policymakers might be back those green industries where Europe is not starting from scratch. "},{"start":158.18200000000002,"text":"Take the still nascent sector of small modular reactors. "},{"start":161.474,"text":"Here the UK and Europe already have homegrown nuclear champions. "},{"start":165.104,"text":"That is at least one area where there is a battle still to win. "}],[{"start":168.41,"text":""}]],"url":"https://d33mkcasurz97s.cloudfront.net/album/196838-1741839647.mp3"}