Swedish battery manufacturer Northvolt has appointed Paul O’Donnell, an expert in corporate restructuring, to lead its Northvolt Ett factory in Skellefteå as the company confronts mounting production setbacks and financial difficulties. This strategic move comes as the factory, Northvolt’s sole active cell production site, struggles to meet quality and output targets.
Despite being operational since late 2021, the Northvolt Ett plant has faced significant hurdles in scaling up production. While an internal goal of 51,000 cells per week was circulated earlier this year, the factory has reportedly only achieved this output once in recent months. The company has since acknowledged that these figures are no longer reflective of its current objectives.
The appointment of O’Donnell, who brings substantial experience in financial restructuring from his previous roles, is part of Northvolt’s broader efforts to address its challenges. This includes reorganization at the management level, cost-cutting measures, and a strategic review following the loss of a major order from BMW earlier this year. The German automaker, previously a key customer and shareholder, canceled a multi-billion-dollar order for prismatic cells in favor of large-volume round cells for its upcoming electric vehicle lineup.
The cancellation compounded Northvolt’s struggles, drawing attention to production inefficiencies and placing financial pressure on the company. With industry confidence waning, reports indicate that another significant customer, Scania, is exploring alternative suppliers for battery cells to support its electric truck production.
Northvolt is also reportedly considering bankruptcy protection under Chapter 11 in the United States, a move that would provide temporary relief from creditors and facilitate financial restructuring. However, this depends on securing an estimated $300 million in fresh capital from a consortium of banks and existing investors, including Goldman Sachs.
Government support remains uncertain, with Sweden declining further investment and Quebec, where Northvolt is building another manufacturing plant, yet to make a decision. Construction on the Quebec facility, originally set to open in 2026, has been delayed until 2028, reflecting broader challenges within the company.
Source: financialpost
