Volkswagen, Northvolt’s largest shareholder, has significantly written down the value of its 21% stake in the Swedish battery cell manufacturer following the company’s recent bankruptcy protection filing in the United States, according to sources familiar with the matter.
The writedowns reflect Northvolt’s repeated struggles to meet production targets and a weaker-than-anticipated surge in electric vehicle demand in Europe. These adjustments at Volkswagen have occurred throughout 2024, though the company has not disclosed the current valuation of its stake. At the end of 2023, Volkswagen valued its holding at €693 million ($726 million), marking a nearly 25% decline from the previous year. Sources indicate this figure has fallen substantially over the course of the year.
Volkswagen declined to comment on the writedowns or the broader implications of Northvolt’s bankruptcy on its operations, maintaining that it will not issue statements regarding the matter. Despite the challenges, Volkswagen anticipates an operating profit margin of 5.6% and net cash flow of €2 billion in its automotive division for 2024.
Other shareholders, including Goldman Sachs-managed funds, Northvolt’s second-largest investor with a 19.2% stake, reportedly plan to write off their $900 million investment by year-end. Swedish pension fund AMF, another major shareholder, confirmed ongoing reviews of its unlisted holdings’ valuations, acknowledging Northvolt’s reduced worth compared to a year ago.
The setbacks at Northvolt underscore the broader challenges in the European EV battery sector amid shifting market dynamics and heightened competition.
