The Failure of a supposed to be Battery Champion: The Northvolt Case

Résumé:

The global battery production market is dominated by Chinese and Korean firms. For several years now, Europe has continued to lag behind in cell manufacturing technology, production capacity, and raw material processing, remaining heavily dependent on Chinese and other Asian producers across the entire battery value chain. This is why various entrepreneurial and political projects have been launched to address this economic and geopolitical gap. One such project was the battery manufacturer Northvolt.

In the early 2020s, the Swedish company Northvolt had established itself as a central symbol of Europe’s ambition to gradually reduce its dependency on Asian supply and know‑how. Backed by substantial foreign and European investment as well as supportive European and national industrial policies, Northvolt set out to build a vertically integrated battery value chain in and from Europe: it constructed a large‑scale gigafactory in Skellefteå, a research and development facility in Västerås, and a cell assembly plant in Gdańsk, while positioning itself as a key partner for major European OEMs. Further large‑scale investments in Germany and Canada had already been signed. Northvolt thus came to embody the hope that Europe could develop its own competitive and globally relevant battery cell industry.

Yet, as is well known, Northvolt ultimately failed. In November 2024, Northvolt filed for Chapter 11 protection in the United States. This was followed by large‑scale lay‑offs, particularly in Skellefteå, before the company filed for bankruptcy in Sweden in March 2025. Since then, most of Northvolt’s assets have been acquired by the US‑based battery manufacturer Lyten.

Northvolt’s failure raises questions: Why did Northvolt not succeed, and what does its case reveal about structural obstacles to establishing large‑scale battery cell production in Europe?

The following paper aims to examine the Northvolt case in order to shed light on these questions in the context of Europe’s attempt to build a fully integrated domestic battery supply chain. The analysis builds on a master’s thesis at the University of Salzburg, followed by desktop research and qualitative fieldwork carried out as part of the project Battery Manufacturing in East Asia and Europe - Networks and Regimes of Labor and Production (funded by the Hans-Böckler-Stiftung). The qualitative fieldwork was conducted in Skellefteå, Sweden, in October 2025 and includes interviews with former Northvolt employees, IF Metall’s Northvolt ombudsman, municipal officials, local researchers and journalists, as well as document and media analysis, offering a multi‑perspective view of the rise and fall of Europe’s would‑be battery champion.

Empirically, the paper traces Northvolt’s failure back to a constellation of interacting factors, including product strategy, dependence on equipment suppliers, project organisation and financial overextension. Taken together, these pressures generated a situation of chronic time pressure and organisational overload during the critical ramp‑up phase - one in which internally and externally imposed time scales proved increasingly impossible to meet, and in which the accumulation of unresolved technical and organisational problems ultimately contributed to the company’s insolvency.

These dynamics are reflected in and reinforced by labour conditions on the shop floor. The ramp‑up phase produced a highly volatile working environment marked by safety deficits, high turnover and a systematic marginalisation of blue‑collar knowledge in problem‑solving processes. Interventions by the responsible trade union met with a management culture that showed considerable hesitation towards co‑determination and the participatory practices characteristic of Swedish industrial relations. The resulting working environment shifted between the hegemonic appeal of green industrial enthusiasm and the despotic realities of extreme time pressure, safety deficits and uncoordinated work organisation.

The Northvolt case illustrates the risks and everyday realities underlying Europe’s attempt to transform its automotive industry in a sector currently dominated by a few powerful actors, particularly from China and East Asia. In doing so, it can contribute to current debates on how Europe’s battery industrial policy needs to be designed if its transition is to deliver not only on technological, but also on social and labour promises.