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Automotive Industry
VW's comments follow reports saying that Northvolt's largest shareholders, VW and Goldman Sachs Group, have not yet disclosed whether they will inject fresh capital into the company.
Volkswagen said it remains a supporter of Swedish battery maker Northvolt's ramp-up following reports that the automaker is undecided on financing the company in the near future.
"We are in close contact with Northvolt and are supporting the industrial ramp-up of the existing production lines," said a spokesperson for VW, which owns around a fifth of Northvolt and is looking to cut costs to become more competitive.
Sweden's prime minister, Ulf Kristersson, said the Swedish state will not take a stake Northvolt and the company's future must be determined by its private owners.
"We don't involve ourselves in the business plans of individual companies but we do want to be a good place for this kind of industry," he said.
VW's comments follow reports saying that Northvolt's largest shareholders, VW and Goldman Sachs Group, have not yet disclosed whether they will inject fresh capital into the struggling company.
It's unclear under what terms they would be willing to participate in a new financing round, which is delaying the fundraising process, according to a Swedish Radio report on 16 September 2024.
"The work with financing is ongoing and we will return with more information when we are ready," said Matti Kataja, a Northvolt spokesperson.
Northvolt is looking to raise 7.5 bn kronor ($737 m), half the amount it had eyed initially, Dagens Industri reported. The newspaper said the company needed to raise the funds in order to make September salary payments.
Northvolt has said it will shrink its operations and cut jobs, sparking fears that Europe's best shot at a home-grown electric vehicle battery champion may stall.
Another Swedish publication, Norran, reported that the company had informed employees that it was halting all travel and expenses.
"We are making several tough decisions to keep costs down — these measures are part of that," Kataja said.
Northvolt said in June that it would undertake a strategic review to refocus its expansion plans after a series of setbacks such as production delays and BMW cancelling an order.
The company on 9 September 2024 said it would suspend parts of the production at its gigafactory in Sweden and that the planned construction of plants in Germany, Canada and southern Sweden faced delays as the company scales back its rapid expansion.
Northvolt has led a wave of European startups investing tens of billions of dollars in battery production to serve the continent's automakers as they switch from internal combustion engines to electric vehicles.
But growth in EV demand is moving at a slower pace than some in the industry had projected, and competition remains stiff from China, which controls 85% of global battery cell production, International Energy Agency data shows.