Northvolt Unlikely to Meet Its Production Goal
Northvolt is failing to reach an acceptable battery cell yield. According to industry sources, its ratio of defective battery cells is more than 60 percent. Under the circumstances, the company recently began to replace its Chinese manufacturing equipment with South Korean.
Earlier, Northvolt said that it would produce 300,000 EV batteries a year in Sweden starting from the second half of this year. However, the goal is unlikely to be met as the equipment replacement and stabilization will take time. This is also affecting Volkswagen Group, which is in partnership with Northvolt. The automaker recently asked LG Energy Solution and SK On to develop prismatic EV batteries, despite the fact that the two companies are currently producing pouch-type and cylindrical batteries without producing prismatic ones.
Northvolt’s low production yield is likely to have a serious impact on the European Union’s efforts to become less dependent in the EV battery industry. At present, selected European companies are developing technologies in the project led by Germany, France, Sweden, Poland, Finland, Belgium and Italy. Germany’s investment in the project amounts to 1.25 billion EUR and France and Italy have invested 960 million and 570 million EUR, respectively. The European Commission is planning to invest 3.2 billion EUR, too.
These days, Northvolt is contacting South Korean material suppliers in order to improve its products. Along with the equipment replacement, this means the possibility of the project going as planned may fall. ACC, another European company in the industry, recently signed a contract with Solus Advanced Materials for battery foil procurement and is seeking cooperation with other South Korean material suppliers as well.