Northvolt Sells California Plant to Lyten Amid European Expansion and Financial Challenges
Northvolt, a Swedish company specializing in energy storage solutions for electric vehicles, has announced the sale of its California plant to Lyten, a U.S. start-up focused on lithium-sulfur battery technologies. The decision is part of Northvolt's strategy to concentrate its resources on the European market and bolster its industrial ambitions in the region.
As part of the restructuring, Northvolt will relocate research and development activities on lithium-metal from California to Sweden. This move aims to optimize production and meet the growing demand for sustainable energy storage solutions in Europe. Northvolt has emphasized that its mega-plant project in Quebec remains a strategic pillar and will not be impacted by this reorganization.
Lyten, founded in 2015, is experiencing rapid growth in the U.S. energy storage sector, particularly through its development of lithium-sulfur batteries. This technology offers significant potential for electric vehicles, as it avoids the use of critical metals like cobalt and nickel, which are often sourced from China. Lyten has announced plans to invest over $1 billion in a lithium-sulfur battery giga-factory in Reno, Nevada, with production slated to begin in 2027. This initiative is part of a broader effort to reduce U.S. dependence on foreign supplies of critical metals and strengthen the domestic energy storage supply chain.
For Northvolt, the sale of its California site is aligned with its focus on European projects, including a plant under development in Germany, supported by a €902 million subsidy, and another plant in Sweden in partnership with Volvo Cars. These projects are designed to meet the rising demand for electric vehicle batteries and advance Europe’s energy transition efforts.
Despite these strategic moves, Northvolt is facing considerable financial pressures. According to reports, the company has recently considered filing for Chapter 11 bankruptcy protection under U.S. law as one of several options to address its financial challenges. Since its founding in 2016, Northvolt has raised approximately €10 billion in funding but has struggled with production issues, the loss of a major client, and difficulties in securing additional financing.
In October 2024, a Northvolt subsidiary, Northvolt Ett Expansion AB, declared bankruptcy following the cancellation of an expansion project at its Skellefteå plant in Sweden. The subsidiary’s debts were estimated to be between 2 and 3 billion Swedish kronor (approximately $194 to $290 million), further highlighting the financial strain on the company.
Northvolt is actively engaging with creditors, shareholders, and clients in efforts to secure short-term financing and evaluate other strategic options to stabilize its financial situation. While the possibility of Chapter 11 bankruptcy has been mentioned, no final decision has been made, and the company remains committed to exploring all viable paths to navigate its current challenges.
