Swedish battery manufacturer Northvolt is reportedly discussing with investors and lenders to secure approximately €200 million ($218 million) in short-term funding. According to sources, the funding is intended to stabilize the company’s finances amid production challenges and increasing competition in the battery industry.
Negotiations have been ongoing throughout the week, with Northvolt also pursuing a larger, long-term capital raise. “The company still aims to raise a larger amount of capital for the long term,” stated one source who chose to remain anonymous. Another source indicated that the short-term funding is unlikely to meet Northvolt’s extensive financial needs.
In response to recent financial pressures, Northvolt announced job cuts and a streamlining of its operations. The company referred back to a statement from September 24, affirming significant progress in raising capital, but declined to provide further comments.
The short-term funding plan under discussion includes a mix of customer pre-orders and loans. Reports suggest a verbal agreement for €150 million has been reached, though finalization is still pending. This amount is considerably less than the €1.44 billion the company sought months prior.
Scania, a shareholder in Northvolt, is pivotal in the funding discussions. A Scania spokesperson confirmed, “Scania is in close dialogue with Northvolt,” without offering additional details. German automaker BMW canceled a $2 billion order earlier this year and is not participating in the current fundraising efforts.
Despite facing production setbacks, Northvolt remains committed to its expansion plans, including developing a factory in Heide, Germany. Since its establishment in 2016, the company has secured over $10 billion in equity and debt financing from prominent investors such as Volkswagen, Goldman Sachs, and BlackRock.
Source: Reuters
