Reuters and Bloomberg Law have indicated truck manufacturer Scania is set to be key in ensuring Swedish battery company Northvolt remains afloat heading into the future.
There have been doubts as to whether Northvolt would be able to pay its taxes – due October 14 to the sum of over US$27 million – and the organisation has been forced to cut 1600 jobs across its operations following its falling onto hard times.
The now cash-strapped company is one of the best-funded startup’s in European history after it earned over $10 billion in equity and debt financing, however trouble emerged when German carmaker BMW cancelled a $2 billion order in June this year.
Scania, one of Northvolt’s shareholders, has confirmed it is “in close dialogue” with the embattled company, with two unnamed sources confirming the truckmaker is spearheading discussions to ensure the battery-maker receives the funding required to pay its debts and remain afloat.
Short-term funding could be made up of a mix of pre-orders from customers alongside loans.
The unnamed source also confirmed there is a verbal agreement for 150 million euros of funding but a final deal is yet to be agreed.
CEO and co-founder of Northvolt, Peter Carlsson, said uncertainty in the international battery industry has directly impacted the company’s new, “narrower” direction.
“While overall momentum for electrification remains strong, we need to make sure we take the right actions at the right time in response to headwinds in the automotive market and the wider industrial climate,” Carlsson said in late September.
“We now need to focus all our energy and investments into our core business. Success in the ramp-up of production at Northvolt Ett is critical for delivering to our customers and enabling sustainable business operations.
“Recent production records at Northvolt Ett show we are on the right path, but the decisions we are taking, however tough, are required for Northvolt’s future.
Northvolt has stated it has mobilised internal resources to aid employees affected by the job cut will be aided in their search for new employment and assisted in relocation.
It is also establishing a taskforce with external partners to provide additional support.
“Today marks one of the most challenging times in our company’s journey as we face the reality of reducing our workforce,” Northvolt Chief People Officer Daniela Maniaci says.
“Our priority is to offer as much support as possible during this time to all our employees, especially those impacted by redundancy.
“In supporting employees who will leave the company, we are committed to handling the process with compassion and care and ensuring everyone receives guidance needed for their next steps.
Due to the confidential nature of the matter, Reuters’ sources around Northvolt’s funding push and Scania’s involvement have not been named.
Reuters has also reported the company is attempting to sell redundant battery materials in order to raise cash, and a company subsidiary has filed for bankruptcy after replacing the head of its battery cell factory in Northern Sweden.
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