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Reuters – Scania tries to breathe life into troubled EV battery maker Northvolt

Reuters – Scania tries to breathe life into troubled EV battery maker Northvolt

[1/4]A man stands in front of the Northvolt Ett factory in Skelleftea, Sweden, November 27, 2024. REUTERS/Marie Mannes/File Photo Purchase Licensing Rights

  • Scania is supporting Northvolt’s operations in Sweden
  • Scania staff heavily involved in day-to-day running of Northvolt Ett plant, documents
  • Northvolt faces financial struggles, needs $1.29 bln to overhaul, sources
  • Northvolt filed for Chapter 11 after financing talks collapsed

STOCKHOLM, Jan 31 (Reuters) – Truckmaker Scania has stepped in to help Northvolt with the day-to-day running of its flagship plant in northern Sweden, a last-ditch effort to boost quality and output at the struggling electric vehicle battery maker as it scrambles to secure funds.

Since November, Scania has sent members of staff to Northvolt’s Ett plant in Skelleftea, 200 kilometres below the Arctic Circle, according to internal Northvolt documents reviewed by Reuters that outline Scania’s support strategy for the green tech player. The plant employs some 2,500 people.

Four Northvolt workers told Reuters they had seen Scania employees, identifiable by an orange visitor armband, inside the factory in recent months, with one saying this was happening as late as this week.

Scania acknowledged to Reuters that it was assisting with the production ramp-up and that it had sent staff to the Northvolt Ett plant for a period, but declined to provide further comment.

Under the support plan, which has not been reported, each Scania staff member is to be paired with a Northvolt shift manager or team leader to “coach” teams while “simultaneously helping to drive improvements and implement standards”, an internal presentation dated early November read.

Reuters could not ascertain the exact number of Scania employees involved in the initiative.

Northvolt, considered Europe’s best chance to create an EV battery champion, downsized drastically last year and filed for U.S. Chapter 11 bankruptcy on Nov. 21 after financing talks with investors and creditors including Scania, Goldman Sachs(GS.N), and Volkswagen (VOWG_p.DE) collapsed amid persistent quality concerns.

While Scania – a top Northvolt customer – has been close to the EV battery maker from the start, its hands-on involvement in the production process is a recent development and goes beyond its relationships with other customers, a Reuters review of internal documents and court filings as well as conversations with eight sources familiar with the situation showed.

Asked about Scania’s involvement, Mikael Stenmark, chief safety union representative at Northvolt, confirmed to Reuters the truckmaker had been assisting the Swedish group to boost and maintain quality and improve its organisational structure.

He told Reuters,

The others (customers) have not been that interested in the same way,

One more person with knowledge of Northvolt’s operations said Scania was heavily involved and immersed in the production process.

The Swedish battery-maker, whose current funds may run out in weeks, needs $1.29 billion to overhaul its business, Reuters reported on Tuesday.

Scania, controlled by Volkswagen’s commercial vehicles arm Traton Group (8TRA.DE), depends on Northvolt for battery cells for its e-trucks and owns a stake in the Swedish green tech player. It pledged Northvolt $100 million as part of the U.S. bankruptcy deal.

Volkswagen is Northvolt’s top investor with a 21% stake.

Contacted by Reuters with its findings, Northvolt said it is common practice for a carmaker to be involved in a supplier’s production, adding it was particularly thankful for its trusted partnership with Scania.

Audi and Porsche, which are also Northvolt’s customers, have occasionally visited the factory, but the consistent presence of Scania staff was unusual, according to two long-time employees.

An Audi spokesperson said the group did not comment on individual suppliers and contract details, adding that

As a general matter, we are in continuous contact with all suppliers and aim for good, long-term cooperation.

A spokesperson for Porsche said it does not comment on possible or existing suppliers.

Under the support plan, Scania staff were due to attend regular meetings with Northvolt’s management and other employees to deliver updates and suggest improvement initiatives.

A collapse of Northvolt, which could come soon without additional funds, may leave Scania without immediate EV battery options, even though it has been in talks with other suppliers.

It would also leave Europe reliant on dominant Chinese battery makers such as BYD (002594.SZ), and CATL (300750.SZ).

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Reuters – Scania tries to breathe life into troubled EV battery maker Northvolt, source

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