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Wins, losses and warning signs in the global BEV race 

Following Swedish battery-maker Northvolt’s recent struggles, ATN took a snapshot of the wider BEV world and wondered, what’s next? 
BYD ETH8 electric truck at the Hannover IAA Transportation Motor Show.

Electrification of the heavy vehicle sector is, largely, seen as one of the pillars of the industry’s decarbonisation and a crucial part of the eventual push towards net zero for countries all over the world. However, despite the incredible technological advances being made and the immense amount of funding being committed to the improvement of battery electric heavy vehicles, there are still severe levels of volatility in the emerging industry. 

The story of flagship Swedish battery-maker  Northvolt over the past few months has shown that volatility more strongly and publicly than perhaps any other company involved in the battery production supply chain. Its challenges stand out against what, on the surface, looks to be a list of significant leaps forward in the sector across the globe. 

In North America, DHL Supply Chain US has recently been full of praise about the successes of its trial of the Tesla Semi and has committed to integrating the truck into its fleet once large-scale production commences in 2026. 

In Asia, Chinese companies Contemporary Amperex Technology Co (CATL) and the Warren Buffet backed Build Your Dreams (BYD) Co Ltd continue to dominate the industry through their production of shorter life, but cheaper and more accessible batteries. 

BYD has also just released its first all-electric ute, named the ‘BYD Shark’ that is looming as a game-changer in the light utility vehicle space. 

MAN Truck & Bus, who invented the world’s first diesel engine truck with direct fuel injection, also recently handed the keys to its first ever electric truck, a 40-tonne eTGX, to a client in Germany. 

The MAN eTGX, MAN's first BEV offering.
The MAN eTGX, MAN’s first fully-electric heavy vehicle offering. Image: MAN Truck & Bus

Even in Australia, the race to become world-leaders in the BEV landscape has taken hold in Queensland. eLumina has opened its $20 million Gold Coast factory and partnered with Addelec to accelerate the deployment of its EV chargers across Australia, while the state government is managing a database aimed at better connecting different parts of the battery supply chain to promote further collaboration and progress. 

Northvolt, has typically been held up as the leading European competitor to Chinese companies in the BEV battery production space, but it has landed on uncertain times. 

In recent weeks it has been forced to shed 20 per cent of its workforce – 1600 employees – across its Skellefteå, Västerås and Stockholm operations in a bid to revise its current structure amid financial difficulties. 

It has placed its ambitious Northvolt Ett expansion project on hold and faced some doubts as to whether it would be able to pay its 287 million kronor (AU$40.1 million) tax bill – however the company has confirmed the bill was paid by the October 14 deadline. 

Following the redundancy announcement, Northvolt’s co-founder and CEO Peter Carlsson said: “while overall momentum for electrification remains strong, we need to make sure that we take the right actions at the right time in response to headwinds in the automotive market and wider industrial climate”. 

Carlsson is correct in that there is still global appetite to produce battery electric heavy vehicles, but the current standing of his company offers a stark reminder that it is not yet a totally stable and dependable industry. It’s still experiencing growing pains, much like the diesel heavy vehicle industry did from the early 20th century. 

Northvolt – the journey so far 

Northvolt AB was founded in 2015 by former Tesla executives and rapidly emerged as one of the most exciting, world-leading battery manufacturers for a heavy vehicle industry that was crying out for plausible decarbonisation initiatives. 

Carlsson, alongside the likes of Paolo Cerruti and Harald Mix, guided the company to become one of the most well-funded start-ups in European history with over $10 billion in equity and debt financing secured. 

It opened what it labelled its first ‘gigafactory’ in northern Sweden, which claimed the ability to power one million electric vehicles annually and boasted an annual production capacity of 60 gigawatt hours. 

The now paused Nothvolt Ett expansion project was set to extend the company’s output by a potential 30 GWh. 

“Marking a new chapter in European industrial history, the cell is the first to have been fully designed, developed and assembled at a gigafactory by a home-grown European battery company,” Northvolt said at the time. 

After its initial financing and the commencement of its manufacturing operations, Northvolt rapidly ascended to the status of Europe’s most developed battery producer and was positioning itself as a key player in the entire lifecycle of battery-powered transport, from research and material production to end-of-life recycling. 

While Northvolt looked to be thriving, the status of battery manufacturing in the European Union had hit stormy seas. 

Former Italian Prime Minister and European Central Bank Chief Mario Draghi was commissioned to write a report on how Europe could continue its greenification through the production of battery electric infrastructure in the face of a more volatile international economy and increased global friction. 

The report, titled ‘The future of European competitiveness’, was released in September 2024 – 12 months after it was commissioned – and is a beefy 400-page warning claxon to the European Union. It called for increased collaboration between countries and increased funding to the tune of up to 800 billion euros per year to keep up with Chinese production and not be left behind in the arms race for global dominance in the emerging industry. 

That princely 800-billion-euro sum constitutes up to 5 per cent of the EU’s GDP, which is staggeringly higher than the 1-2 per cent in the Marshall Plan that outlined the rebuilding of Europe following World War Two. 

The loss of cheap energy from Russia due to the fallout of the continuing conflict between Russia and Ukraine was also cited as a key reason as to why the EU needed to move now – and move fast. 

Draghi ominously warned “it’s ‘do this’, or it’s a slow agony,” at the time. 

No company represents Draghi’s ‘slow agony’ theory more than Northvolt. 

Northvolt’s operations could be seen as reminiscent of the wider state of the EU, and the sprawling nature of its business model saw it struggle to compete with Chinese competitors like CATL and BYD. 

The EU’s decision-making process had been cited by Draghi as complicated and lethargic. In comparison to this, the likes of BYD and CATL have benefitted from China’s natural supply of lithium which has the companies perfectly placed it to be able to provide bulk batteries for cheap. 

According to the Financial Review, CATL batteries currently power one in every three electric vehicles across the globe. 

On the edge 

Many of Northvolt’s shareholders have vested interests in the development of a European-based battery industry, due to the fact they’re European-based vehicle producers. 

Volkswagen and BMW are two of the major players who have bought in to Northvolt and, in fact, Volkswagen subsidiary Scania is being seen as a potential spearhead in providing Northvolt with funding to turn its recent fortunes around. 

The existing, underlying issues with Northvolt came to a head and were dramatically revealed when one of those shareholders – BMW – announced the cancellation of a $2 billion deal between the companies. 

In June 2024, it released a statement regarding the order that contained the following: 

“Northvolt and the BMW Group have jointly decided to focus Northvolt’s activities on the goal of developing next generation battery cells,” it said. 

“The BMW Group continues to have a strong interest in establishing a high-performance manufacturer of circular and sustainable battery cells.” 

The deal had been in action for over two years when it was cancelled. At the time of the July 2020 announcement, BMW said this. 

“Northvolt is the third battery cell supplier we have partnered with, alongside our existing partners CATL and Samsung SDI. Signing this contract is another step towards meeting our growing need for battery cells in the long-term,” said member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network, Andreas Wendt. 

Part of the agreement was Northvolt would obtain 100 per cent of the energy needed to produce the battery cells in the northern Sweden gigafactory through renewable wind and hydroelectric power. A method, according to Chairman of the Board of Management at BMW AG Oliver Zipse, that was targeted at making “an effective contribution to climate protection” and an “aim to improve our products’ overall environmental balance.” 

Co-founder Harald Mix released an op-ed on Northvolt’s website in the immediate aftermath of the company announcing it had paid its tax bill, which contained the following, translated into English. 

“Nobody said it would be easy. Building this type of business is complex, technologically and operationally,” Mix says. 

“Great progress has been made, yet we have not come as far as we would have liked. What is not clear in the debate is that Northvolt produces the highest performing battery cells, has developed hundreds of patents and created thousands of highly skilled jobs. 

Mix went on to discuss the difference in government subsidies paid to Northvolt compared to its competition. 

“Unlike Northvolt, which has so far received less than one per cent in direct support from the Swedish state, other European battery projects have received more than SEK 20 billion (AU$2.84 billion) in state support from France, Spain and Italy. 

“The USA and China pursue active industrial policy which affects Sweden and the EU. 

“As an investor and an entrepreneur, I believe in competition on equal terms … we hope for fair competition without distorting subsidies, where the state’s role is to invest in energy and infrastructure development, competence provision, simplified permit processes and reasonable risk sharing.” 

The wider industry  

BMW’s desire and ability to hedge its bets and maintain partnerships with Swedish-based Northvolt, Chinese-based CATL and South Korean-based Samsung SDI offers a critical snapshot of both the international nature of the emerging battery manufacturing industry, and the cut-throat nature of it. 

Mix cut straight to the point when discussing Northvolt’s current problems and believes more could have been done by Sweden and the EU to promote Northvolt’s success, much in the fashion China and the United States’ governments seem to be doing. 

China currently holds a widening lead in the race to industry dominance through the likes of CATL and BYD, but Australia’s natural lithium supplies and government intervention to kickstarting its battery industry could eventually see it emerge as a strong competitor for its major regional economic partner. However, the struggles to implement battery-electric heavy vehicles into such a large nation depends largely on the progression of charging infrastructure throughout the entire country.  

After all, a battery-electric truck that runs out of charge in the middle of the Pilbara helps no one. 

The United States, while facing similar geographical challenges to Australia, has also seen major private enterprises show a willingness to implement battery electric vehicles into its heavy vehicle fleet, as seen through DHL’s desire to integrate Tesla trucks into its operations. 

The new Tesla Semi.
The new Tesla Semi. Image: DHL Supply Chain

The sheer scale of some of these road transport companies in the United States is almost inconceivable and absolutely incomparable to Australia, and that willingness to adapt fleets to BEVs comes with the added difficulties of replacing thousands upon thousands of trucks. 

That global desire is still also incredibly evident in Europe, despite Northvolt’s faltering over recent months. 

Even in the aftermath of Northvolt’s difficulties, a new factory that will construct sustainable anode graphite solutions – a crucial component of these long-haul batteries – has just been opened in Herøya, Norway, barely a 600km drive from Northvolt’s Stockholm headquarters. 

Carlsson, in fact, said it best when he stated, “overall momentum for electrification remains strong.” He’s correct, but Northvolt serves as a timely – if not dramatic – reminder that the battery electric industry is far from stable at this time of writing. 

The potential and cost of integrating battery electric vehicles into long-haul and heavy vehicle transport operations – especially in large nations like Australia and the United States – is still, largely, indeterminable at best, however the struggles of what has, typically, been one of the big players in the market will only add to the lack of certainty surrounding long-term viability and short-term costs all over the world. 

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