Northvolt

[Alpha Biz= Reporter Kim Jisun] Northvolt, Europe’s largest electric vehicle battery company, has filed for bankruptcy protection in the U.S., leading Goldman Sachs to lose its substantial investment of over 1 trillion KRW (approximately $896 million).

According to the Financial Times (FT) on the 24th, Goldman Sachs sent a letter to investors revealing its position as the second-largest shareholder in Northvolt, holding a $896 million stake. The firm stated, “This amount will be fully written off to zero by the end of the year.”

Founded in October 2016 by Peter Carlsson, a former Tesla executive, Northvolt had grown rapidly, securing over $15 billion (approximately 21 trillion KRW) in investments from automakers such as Volkswagen, BMW, and Volvo. Goldman Sachs began its aggressive investment in 2019, three years after Northvolt’s establishment, leading a $1 billion funding round in collaboration with Volkswagen. Over time, Goldman Sachs increased its stake through various investments, holding a 19% share.

Volkswagen, the largest shareholder with a 21% stake, is also expected to incur losses of a similar scale. According to FT, Volkswagen is listed as the second-largest creditor in Northvolt’s bankruptcy filing in the U.S.

Northvolt’s decline was accelerated by a series of setbacks, including an explosion at its Swedish factory last year that resulted in one fatality, as well as challenges related to the electric vehicle market slowdown, known as the "EV chasm." The company reported a $1.2 billion (approximately 1.68 trillion KRW) loss last year, a sharp increase from the previous year’s $285 million loss.

Insiders cited by FT attributed Northvolt’s collapse to poor management, excessive spending, inadequate safety standards, and overreliance on Chinese machinery, which hindered its production expansion.

In June this year, Northvolt faced another major blow when a €2 billion (approximately 2.94 trillion KRW) deal with BMW was canceled, signaling its financial instability and subsequent bankruptcy.

 

 

 

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