Expert on Northvolt sale: "Doesn’t seem all that easy"

On Thursday afternoon, it was confirmed that US battery company Lyten will acquire Northvolt’s factories in Skellefteå and Västerås, as well as its planned site in Heide, Germany.

This follows more than a year of turmoil for the company, including bankruptcy and the sale of its assets – initially looking bleak, but later attracting multiple bidders.

Swedish energy expert Bo Normark sees several positives in Lyten’s purchase of Northvolt’s various operations (the same company had already acquired Northvolt’s Polish plant in July).

"One of the key advantages for me is that it’s a battery manufacturer. I think that has great value. Even though Lyten is relatively small, they have been doing this for ten years and are aware of the challenges involved in making batteries", he hells Impact Loop.

"Lyten’s primary product is lithium-sulphur batteries, which are based on a different chemistry than Northvolt’s lithium-ion batteries. But Lyten themselves say that the production equipment in Skellefteå is very similar to their own."

A way to keep customers

Initially continuing Northvolt’s production of lithium-ion batteries before gradually switching to Lyten’s own products could be a way to retain Northvolt’s previous customers – in the short term, notably Scania – according to Normark.

"The question is how quickly the transition will happen. There will probably be a longer period where sulphur batteries are manufactured in parallel."

Sulphur batteries are a newer technology that can make batteries lighter. This could open up markets where car batteries may no longer be Northvolt’s main focus. In the long run, Normark believes battery technologies based on cheaper materials such as sulphur and sodium are likely to dominate.

"A smaller volume of lithium-sulphur batteries is needed to be large, because the market is bigger. Lyten will probably not focus primarily on car batteries, but rather stationary batteries or new applications for drones and aircraft."

As part of this, Normark suggests Northvolt Labs, the development unit in Västerås, could take on a broader role following the acquisition.

"A number of question marks"

Carl-Magnus Norden, founder of the electrification platform Decade and electric lorry manufacturer Volta Trucks (which went bankrupt in 2023), knows the sector – and distressed acquisitions – well.

He sees a number of uncertainties in Lyten’s purchase of Northvolt, even if he "hopes it will work."

"It’s a big deal that the buyer isn’t Chinese. That means both challenges and opportunities. I think it will be difficult to win back customers who aren’t dependent on buying from a Western producer."

According to Norden, trust will be key.

"This is a business where you need a lot of money to get it going. Customers have chosen other suppliers. The problem after a bankruptcy is that you have to get others to trust that you can deliver quickly."

Norden believes the best talent in the battery sector is in China and doubts it is possible to lead in battery manufacturing without involving one of the Chinese companies in the field.

Sulphur-lithium batteries, Lyten’s speciality, are not a technology Norden has come across before. International media have described them as promising for niche markets, but so far harder to use as a replacement for today’s lithium-ion batteries in vehicles.

"For me, this doesn’t seem all that easy."

Financing the deal

How Lyten finances the acquisition, and its capacity to inject further funds, will also affect how the market perceives the takeover. A press release values Northvolt at $5b (€4,3b), but it is unclear whether that was the actual purchase price.

"If they have put five billion dollars on the table, it certainly gives some credibility," Normark says.