European lithium-ion OEM Northvolt has sold the division in which its ESS manufacturing plant in Poland sits, as it continues to divest non-core assets amidst its ongoing Chapter 11 bankruptcy.
The Sweden-headquartered firm has signed a sale and purchase agreement with what it described as an unnamed ‘leading industrial group’ for the acquisition of its Northvolt Systems Industrial division. The Systems Industrial division was set up to manufacture battery technology for the heavy industry, off-highway and stationary storage sectors.
While Northvolt didn’t name the buyer, Swedish truckmaker Scania confirmed to Reuters that it was the buyer of the division. It said it would roll it into the firm’s power solutions division, which sells engines and components for industries such as construction, agriculture and power generation.
Scania has been one of the company’s first big customers for battery technology for its electric trucks, discussed by the firm’s VP communications last year (Premium access).
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The transacted division was established in 2018, employs 300 people across a prototyping facility in Sweden and the energy storage system (ESS) plant in Gdansk. It offers modules and full systems to numerous industries and three named customers.
They are Epiroc, a Sweden-headquartered manufacturer of mining and infrastructure equipment; Konecranes, a Finnish manufacturer of cranes and lifting equipment; and Dynell, an Austria-based aviation ground support system integrator. Following the acquisition, Northvolt Systems Industrial operations will continue and orders contracted for the year 2025 will be executed as planned.
Two other Northvolt executives discussed the factory’s ESS work with Energy-Storage.news whilst at the Energy Storage Summit Central Eastern Europe 2023, describing the ESS market as one with ‘fierce competition’ (Premium access). One of its first customers was to be system integrator Fluence, but this partnership most likely ended at some point since that interview.
The transaction is contingent upon satisfactory regulatory clearances and the execution of binding agreements.
Matthias Arleth, Northvolt Chief Operating Officer, commented: “It’s not an easy decision to separate from our colleagues at Systems Industrial, that has built such a strong business from scratch in a short time. However, the transaction is one more important milestone reached on our path to focus the company. Step by step we are getting closer to the sustainable and stable platform that is required for our future success.”
Strategic review amidst bankruptcy process
The sell-off of the division is part of Northvolt’s divestment of non-core activities, meaning those outside of battery cell manufacturing and battery cell technology development.
The company, the most-funded of Europe’s numerous battery startups, filed for Chapter 11 bankruptcy protection in the US in November 2024, saying it would seek new investment opportunities from strategic and financial investors, as well as existing lenders, shareholders and customers to continue.
Commentators have pointed to numerous mistakes made by its management team (its CEO stepped down with the announcement) but wider macroeconomic factors were at play. Battery prices from China have fallen substantially and the US’ Inflation Reduction Act (IRA) has provide generous subsidies to battery manufacturing, leaving European projects with challenges in becoming cost-competitive.
