Northvolt Sells US Battery Plant to California Startup Lyten Amid Financial Struggles
Northvolt AB, the financially struggling European battery manufacturer, has reached an agreement to sell its US factory to Lyten, a California-based startup focused on lithium-sulfur batteries. This move is part of Lyten's broader effort to reduce America's reliance on China for battery production. Under the terms of the deal, Lyten will invest $50 million over the coming years, acquiring battery manufacturing equipment from Northvolt, taking over its building lease, and expanding the facility near San Francisco to integrate with its operations in nearby San Jose.
Northvolt, once seen as a potential competitor to China’s dominance in the electric vehicle (EV) battery market, has faced significant challenges, forcing it to seek over $900 million in additional funding to meet long-term capital needs. Meanwhile, Lyten has raised over $425 million from investors, aiming to utilize sulfur as a key battery component, which is both inexpensive and abundant, making domestic production more feasible.
The acquisition of Northvolt's facility marks a crucial stepping stone for Lyten as it plans a larger endeavor—a $1 billion gigafactory near Reno, Nevada, which is expected to begin its first phase of production in 2027. The plant will eventually have an annual capacity of 6 to 10 gigawatt hours, producing batteries for markets ranging from defense industry drones and satellites to scooters and e-bikes.
Lyten’s focus has benefited from US legislation such as the ban on Defense Department purchases of Chinese-made batteries, which aims to decouple military supply chains from Chinese manufacturers. Lyten CEO Dan Cook highlighted that their technology would remain relevant even under the incoming Trump administration, which has promised to repeal parts of the Inflation Reduction Act (IRA). Cook emphasized that Lyten's focus on non-EV battery markets and its commitment to creating American jobs align well with bipartisan goals.
However, Lyten still faces challenges in securing the necessary funding for the Reno plant. The startup expects to finance just under half of the $1 billion required through equity investments, with the rest coming from debt, public infrastructure bonds, Department of Energy loans, and incentives provided under the IRA. This comes amid political uncertainty regarding the future of the IRA, as President-elect Trump has vowed to repeal sections of the act that incentivize domestic battery manufacturing.
The facility being taken over by Lyten was previously operated by Cuberg, a battery startup acquired by Northvolt in 2021. Cuberg and Northvolt had attempted to expand into the electric-powered aviation sector but eventually closed the facility in August, laying off around 200 employees. Lyten plans to innovate using a sulfur-based cathode and lithium-metal anode, aiming for lightweight, energy-dense batteries that could be competitive with nickel-based technologies popular in the US.
The planned Reno factory will initially supply smaller markets that are less price-sensitive compared to EV manufacturers, which typically drive down costs. According to Celina Mikolajczak, Lyten's chief battery technology officer, the company is prioritizing specialized markets rather than mass-market EVs at this stage.
