Concern grows as Lyten’s Northvolt takeover drags on: 'Buying was the easy part'

In August, the US battery company Lyten, led by Silicon Valley tech figure Dan Cook, was presented as the new owner of Northvolt, which filed for bankruptcy in March. The news was greeted with cheers from politicians and local residents alike.

However, the deal has yet to be completed, and according to information provided to Swedish newspaper Svenska Dagbladet, Lyten is struggling with financing.

More than five months after Lyten stepped in as a rescuer, no final payment has been made, several deadlines have passed, and the factory remains idle, with around 170 employees working solely on maintenance, SvD reported.

Lyten lacks both the necessary loans and new capital from its owners, while the company has been tight-lipped about its finances and ownership structure, said the paper, citing sources close to the matter.

Bankruptcy trustee Mikael Kubu confirmed to the SvD that Lyten is responsible for salaries and operating costs, but uncertainty is growing locally and observers say there is a significant risk that the deal will not go through.

Impact Loop has spoken to several experts who offer slightly different assessments of Lyten’s chances of closing the deal and restarting production.

Delay seen as a sign of hesitation

One person with insight into the Swedish battery industry, who does not wish to be named, is sceptical about Lyten’s ability to complete the purchase and get the factory running.

He sees the protracted process as a sign that Lyten has begun to hesitate.

“I think business questions about the project’s feasibility arose after the purchase," the person said. "Either they are trying to find a new way to organise production, or they are trying to get out of the deal.”

Carl Magnus Norden, CEO of Swedish energy startup Decade Energy, said he also doubts Lyten’s acquisition will be completed.

“I’ve been sceptical of Lyten from the beginning," he told Impact Loop. "As I see it, if you want to do this today, you more or less have to do it together with the Chinese – they are so far ahead technologically."

Magnus Norden is no stranger to struggles. He's the founder electric truck maker Volta Trucks, which went bankrupt twice, after raising around €300m from investors.

Even if Lyten were to secure the funding required to complete the purchase, further challenges would remain, according to Norden.

“To get started, we’re talking about tens of billions, and there’s a huge amount that needs to be put in place: suppliers, supply chains, processes and expertise. Much of the supply chain is also Chinese.”

The China question

Northvolt was intended to be Europe's homegrown battery champion, one capable of competing with China, which has a stranglehold on production globally.

Several people we've spoken pointed to the issue of state support – and competition from China – as the biggest question mark surrounding Northvolt's plant.

Battery veteran Bo Normark, who among other things works for energy investor InnoEnergy, says he thinks Europe, and specifically Sweden, needs to do more to support local industries.

"Sweden has been very clear that it does not intend to support new establishments, and we have a negative attitude towards public involvement that differs from almost the rest of Europe,” says Normark, who fears Sweden may fall behind in the battery race.

Normark argues that it is difficult to succeed in the battery sector without support from Chinese players, who are far ahead of other countries.

"It’s also naive to recognise how dependent we are [on China]," he says. "Pretending that the dependency doesn’t exist doesn’t make things better.”

'These things take a while'

However, Normark isn't surprised that Lyten’s acquisition of Northvolt has taken so long given the size of the deal.

“These types of processes often take a long time,” he says.

That stance echoes that of Lyten’s marketing director Keith Norman, who wrote in an email to SvD that the acquisition is complex and that the company is keen to complete it as quickly as possible.

“We have been optimistic from the outset regarding the timetable for getting everything finalised. Some parts are taking longer than expected, but overall the acquisition is progressing according to plan,” Norman wrote.

Asset or liability?

Northvolt focused on making lithium-ion batteries for EVs. Instead Lyten uses a different technology, lithium-sulfur, which experts say could be both an asset and a liability when – or if – production resumes.

“That technology is not directly applicable to car production today," says Normark. "They are targeting other markets and have a clear ambition to build their own supply chains and become more independent, but that lies some way in the future."

In other words, Lyten may find it easier to scale up battery production than Northvolt did, but it cannot simply knock on the door of Northvolt’s former customers. There are advantages and drawbacks.

A factory left idle

As Lyten struggles to finalise the deal, Northvolt's sprawling, billion-dollar plant in Skellefteå, northern Sweden, sits idle.

Daniel Brandell, professor and battery expert at Uppsala University, hopes Lyten will succeed in getting the Skellefteå factory running – for environmental and security reasons alike.

The “state-of-the-art” battery factory left behind after Northvolt’s bankruptcy should be used, he says.

“It is still a good business case to produce batteries in northern Scandinavia. We have access to materials and everything is in place to get started. There will be enormous demand for batteries across a wide range of applications, and Sweden can genuinely contribute,” he says.

According to Brandell, it is important that Lyten – and large-scale battery manufacturing in Sweden – materialises.

“It’s bad for Sweden, for security policy and for the environment if nothing happens. I hope they secure the funding they need, otherwise we will have lost a great deal of time,” he says.