Swedish EV battery maker Northvolt is — to use a highly technical financial term — in deep doo-doo. And it’s having a hard time securing a shovel to dig itself out.
Catch-up: Northvolt has been burning through cash among a slew of failed deliveries, nixed contracts, and a European EV slowdown. It’s concerning for the Québec and federal governments, which have committed billions to a Northvolt plant outside Montréal.
- As Northvolt deflects rumours of impending collapse, it’s had to declare bankruptcy at one of its units, lay off 1,200 workers, and stomach the fact Sweden won’t bail it out.
Driving the news: Northvolt is now nearing a US$300 million emergency stopgap loan from a group of creditors led by Goldman Sachs. But Goldman wants collateral, and is asking Québec’s investment arm to let Northvolt pledge equity in its Canadian wing as security.
- Québec Premier François Legault has come out adamantly against any such deal, refuting an earlier report claiming Québec would be willing to lose some of its investments.
Why it matters: Northvolt already needs more time to complete its Québec plant. Without fresh cash, opening could be pushed further, hindering the competitiveness of Canada’s (allegedly) burgeoning EV industry.—QH