Peter Carlsson came from Tesla's supply chain. Paolo Cerruti came from Tesla's operations planning. They registered the company as SGF Energy in 2015, changed the name to Northvolt in 2017, and spent the next seven years raising more money than almost any industrial startup in European history. Volkswagen put in €900 million. Goldman Sachs came in. BMW. BlackRock. The European Investment Bank extended €350 million backed by the EU's InnovFin program. Scandinavian pension funds piled on. At the peak, before anything had gone wrong in a way that could no longer be hidden, the company had a $12 billion valuation, a $55 billion order backlog, and was adding 150 employees per week.
The pitch was European battery sovereignty. Cells manufactured in Sweden with hydroelectric power, ethically sourced minerals, an integrated recycling loop. The European Commission loved it. Heads of state visited. EURACTIV called Northvolt "the EU's go-to company for home-grown batteries" in 2019.
By December 2023, a classified interim report leaked to Dagens Industri showed Northvolt had lost approximately $1 billion in the first nine months of the year. BMW cancelled a €2 billion contract in June 2024 because the cells were not coming. Carlsson resigned on November 22, 2024, the day after filing Chapter 11 in Texas, disclosing $30 million of remaining cash against $5.8 billion of debt. The Swedish filing followed on March 12, 2025. Largest corporate bankruptcy in modern Swedish history.
Everything that happened after moved quickly. Production tapered through spring 2025, stopped entirely in June. In August, Lyten, a San Jose lithium-sulfur battery company, signed a binding agreement for all remaining assets in Sweden, Germany, and Poland, plus all intellectual property. The book value of what Lyten acquired was around $5 billion.
The story of how the company got from $15 billion raised to $30 million in the bank has been told many times, mostly at the level of macroeconomic headwinds and slowing EV adoption. The story that has not been adequately told is what was happening inside the Skellefteå factory, and it is stranger and more specific than the macro narrative suggests.
The plant was designed for 16 GWh of annual output. In the first three quarters of 2023, it produced 80 megawatt-hours total, with 13 megawatt-hours in Q3 alone. These numbers mean the factory was operating at 0.5% of design capacity. By September 2024, weekly output had reached about 60,000 cells, and only one of the production lines was delivering finished product to an end customer, the truck maker Scania. Carlsson confirmed this himself at his resignation press conference.
The scrap rate tells the other half. A source in KrAsia's August 2025 investigation put it at roughly 80%. The lines were producing cells that failed quality checks, and the lines kept running. A Chinese battery executive who consulted with the company said his own team could bring a new factory to 96% yield in four months. Northvolt had been at it for four years and reached about 70%.
Where this becomes something other than a generic startup failure story is in the details of why the factory could not produce. Those details have been scattered across Swedish local journalism (especially Norran, the Skellefteå newspaper), Chinese industry reporting (KrAsia's investigation drew on engineers who had worked with or at the company), Korean trade press (TheElec), Swedish academic commentary (Christian Sandström at Jönköping), and the Swedish state television investigation (SVT's Uppdrag Granskning). Assembled together, they describe a production environment that was dysfunctional in ways that go well beyond "startup growing pains."
Northvolt bought its core production machinery from Wuxi Lead Intelligent Equipment, a major Chinese supplier. The formation equipment came through Wuxi Lead's subsidiary Titan. TheElec reported as early as 2021 that formation performance was "especially problematic" and that Titan had missed delivery deadlines.
Sandström spoke to a senior Northvolt engineer who told him the equipment was already old when it arrived. Sandström described it publicly as approximately twenty-year-old technology, which is a striking thing to say about equipment supplied by a company that has high standing in the global battery industry. He added, also publicly: "Hundreds of guest workers from China have been operating the machines in Sweden. Displays are in Chinese and Swedish workers at Northvolt use Google Translate to run them."
Google Translate. On production equipment. At a factory that was supposed to be the technological heart of European battery manufacturing.
The Chinese technicians were there because the machines could not run without them. Northvolt's engineering staff could not independently operate the line they had purchased. Documentation was incomplete. System information was missing or had been redacted.
Swedish blogger Lars Wilderäng, citing anonymous sources inside the company, claimed that certain components appeared remotely controllable and that the knowledge gaps looked intentional. Swedish commentators have speculated about deliberate Chinese interference. Whether or not that framing holds up, the operational outcome is not in dispute: the company that existed to end European dependence on Asian battery supply could not run its own equipment without Asian personnel on-site.
The technicians rotated on tourist visas. Every three months, out and back. When COVID-19 closed borders, Northvolt proposed that the Wuxi Lead teams meet them in Dubai. KrAsia's source on the Chinese side interpreted the Dubai suggestion as having more to do with arranging a pleasant trip than with solving machine problems. Without the technicians walking the floor in Skellefteå, equipment faults lingered. The Local, in February 2026, reported the total cost of the untested-machine gamble at approximately ten months of lost production time. Northvolt's own engineers spent those months rebuilding equipment and adding functions that had been absent from delivery.
Spare parts were another problem. Precision-machined components could not be sourced in Europe. They flew in from China. After delivery at the factory gate, pieces vanished before installation. One source put the loss rate at 30% on a good day.
And the crates. Investigators found roughly €430 million of purchased equipment sitting at the factory site in unopened shipping containers and boxes. Not broken equipment. Not rejected equipment. Equipment that had never been taken out of its packaging. The spending was running so far ahead of the factory's capacity to absorb it that hundreds of millions in machinery sat idle in crates while the production lines next door struggled with 80% scrap rates.
Northvolt promised vertical integration from raw materials to finished cells. The narrative rested on producing NMC cathode active material at Skellefteå, on-site, using Swedish hydropower. This was what made "the world's greenest battery" something beyond marketing copy. If the cathode came from a Chinese supplier, then the independence story collapsed.
The cathode mixing and synthesis operation failed. Norran broke this story in detail. Nearly all internally produced cathode material did not meet quality standards and was sent to Revolt, Northvolt's own recycling subsidiary. Factory manager Mark Duchesne confirmed to Dagens Industri in mid-2024 that Northvolt was Revolt's largest customer. His words: "We've had a significant amount of material lost in the process. Too much, far too much. We recycle our own material."
The workaround was importing thousands of tons of pre-made NMC material from China. When the Chinese cathode material entered the production line, cell output improved. Duchesne announced rising volumes. The company handed out gift cards to employees.
SVT's Uppdrag Granskning later examined what Northvolt had actually sold to customers. The conclusion: a very limited number of cells had reached the market, and those cells were made from intermediate materials purchased externally. The cells were not produced "100% in Sweden," as Northvolt had repeatedly stated. The company's core value proposition, the thing that had moved billions from European investors and public institutions, did not correspond to what was happening on the factory floor.
KrAsia's investigation, drawing on Chinese engineers who had worked with the company, reported specifics from the production lines that give texture to the scrap rate numbers.
On the coating lines, where electrode slurry is applied to metal foil at micrometer-level thickness, the output was visibly defective. Chinese manufacturers routinely produce electrode sheets with mirror-like surfaces. Northvolt's sheets had holes in them. An engineer described seven or eight perforations in a ten-meter strip. One such defect at CATL triggers a multi-page root cause report. At Northvolt, perforated electrode sheets had become part of the daily routine.
On the slitting lines, where coated electrode rolls are cut into narrower strips, Northvolt's design team wrote a specification calling for 0.1-millimeter tolerance. Available slitting machines hold 0.5 millimeters at best. The company knew the gap existed and insisted on the tighter number anyway, expecting that the demand itself would somehow produce a better outcome. It produced defective strip.
On the quality inspection cameras, Northvolt engineers decided the existing models were inadequate and replaced them with higher-end units. The production line had been designed as an integrated system with calibrated optics. Swapping in a different camera without understanding the system-level dependencies made inspection worse, not better. The KrAsia report captures a pattern here that ran through the entire operation: Northvolt's engineering staff, many of whom were highly educated and accustomed to working from theoretical principles, repeatedly overrode systems designed through decades of iterative Asian manufacturing experience, on the assumption that a more ambitious specification or a more advanced component would yield improvement. It did not.
Norran interviewed factory workers over an extended period. One engineer, who had been drawn to Northvolt by the advertised flat hierarchy and the promise of the project, described a different organizational reality. The hierarchy was not flat. It was segmented along national and ethnic lines, with hiring patterns creating clusters and information flowing through personal networks rather than formal channels. The engineer, who had extensive experience in chemical processes, said that identifying problems and proposing solutions to management got him told to be quiet.
KrAsia's Chinese sources described a different dimension of the same breakdown. Communication across the multinational workforce collapsed constantly on technical terminology. Experienced Chinese battery engineers, the people with the most relevant production knowledge, spoke limited English. Translation software garbled the technical vocabulary. Engineers from countries without a battery manufacturing tradition, unable to assess the translated content against their own experience, compounded the errors.
Mikaela Lundh, a former employee, published a book in May 2025 (Northvolt – en skildring inifrån) documenting that leadership knew about unacceptable defect rates, failing humidity control, broken automation, and an accelerating cost trajectory as early as 2022. Employees suspected of leaking to the press faced threats of dismissal, according to Lundh's account.
The endpoint, described by an industry source to KrAsia, was an engineering department that had withdrawn from the production floor. The engineers sat in offices producing PowerPoint decks that analyzed problems, traced root causes, and proposed solutions with impressive thoroughness. The decks were filed. The production floor did not change.
Carlsson sold shares between 2019 and 2022 for approximately 200 million Swedish kronor. Dagens Industri published the figure. At his final press conference he disputed the amount, said it was less than five percent of his holding, and called the follow-up question "incredibly stupid" before leaving.
Norran found him months later at a Stockholm co-working space on Luntmakargatan. He had a half-eaten kebab. He apologized for eating during the interview. He talked about the early days, about driving in from the airport to Skellefteå and seeing a "Welcome Northvolt" sign, and his face lit up at the memory. He described his expansion strategy as "sequential thinking," construction teams moving from one site to the next as each was completed, process teams following behind. He acknowledged that when the Skellefteå ramp-up stalled, the other projects should have been postponed. He said he had believed the bottlenecks would be solved.
He mentioned car manufacturers as demanding customers who sent large quality engineering teams to evaluate Northvolt's progress, and that Northvolt then had to assemble matching teams to host them and prepare presentations, diverting resources from production. He asked, rhetorically, whether a supplier could say no to a customer that was also a co-owner.
He is now working on "his own timeline," possibly a book. He has co-founded an AI startup focused on manufacturing process optimization.
Affärsvärlden columnist Peter Benson raised the question of whether the board should face personal liability under Swedish insolvency law, which holds directors responsible for losses if they continue operating a company they know to be insolvent. The total consumed: approximately 120 billion SEK. The AP Funds wrote down 5.8 billion kronor. The Canada Pension Plan Investment Board took losses. Investment Management Corporation of Ontario lost $400 million. Small suppliers in northern Sweden went unpaid. Foreign workers who had moved to Skellefteå for Northvolt jobs, and who lacked Swedish residency, faced deportation after the layoffs.
This section of the Northvolt story sits apart from the financial and manufacturing narrative, and it should.
Mahari Baraki, 33, had moved from Eritrea to Skellefteå to work as a cleaner at the Northvolt factory through Sodexo. His wife and three children were going to follow once he was settled. On January 4, 2024, he worked an evening shift. The next day, his flatmate found him dead in bed.
Maedin Ghidey Embaye, 19, had been at the factory eight months. It was his first job after school. He finished a late-night shift in February. His mother, Hadas Kibrom Woldemariam, later held up his graduation photograph for Norran's cameras. He was found dead in bed the day after his shift.
Per-Håkan Söderström, 59, was a local Skellefteå man. Colleagues drove him home after work in early June. When they came to pick him up the next day and he did not answer, they called police. He was dead on his balcony. He had passed a recent health examination.
A fourth worker drowned at a local bathing spot later that summer.
Norran broke the story connecting the three home deaths. Toyota pulled its personnel from the factory. A leading Swedish toxicologist called for the plant to be shut down for investigation. Police opened a combined inquiry. In December 2024, they concluded there was no evidence of hazardous exposure or crime. Three of the four causes of death remain undetermined.
Northvolt's spokesperson said the company hoped the police conclusion would "put an end to the speculations and rumours." The company had previously noted that with over 5,000 employees, the deaths were "not as statistically significant as they may appear at first glance."
CATL came from ATL, which made lithium-polymer cells for mobile phones starting in 1999. BYD made batteries for consumer electronics before it made them for cars. Samsung SDI and LG grew up inside conglomerates that had been doing precision manufacturing in semiconductors and displays for decades. These companies accumulated something over that time that does not appear on balance sheets: tens of thousands of engineers who have spent whole careers solving the specific problems of lithium-ion production, and supplier networks that co-evolved with the battery industry through thirty years of incremental equipment iteration.
Europe does not have that workforce, those suppliers, or that accumulated experience. When Northvolt needed slitting machines and coating equipment and formation systems, Asia was the only source. When the machines arrived with Chinese-language interfaces and missing documentation, there was no domestic alternative to turn to. When cathode synthesis failed, the cathode came from China. When spare parts were needed, they flew in from China.
CATL's Debrecen, Hungary factory has already produced over 120,000 battery modules. Full cell production is expected in 2026 at 40 GWh capacity. CATL's German facility is profitable. A €4.1 billion LFP plant in Spain, jointly with Stellantis, will supply packs for up to one million EVs per year. BYD's European installations grew 216% year-on-year through October 2025. The combined European footprint of Asian manufacturers is expanding faster than any European-owned venture can match.
Among European ventures: Verkor, backed by Renault, sticks to one chemistry and one customer. ACC, the Stellantis-TotalEnergies-Mercedes venture, has hit its own delays. PowerCo, Volkswagen's in-house unit, partnered with China's Gotion.
Altris, the Swedish sodium-ion startup, drew an explicit lesson from Northvolt. CEO Christer Bergqvist, speaking at Techarena in Stockholm, told Euronews: "The time of signing an offtake and using that to get funding and then hiring and scaling is not as imminent anymore." In January 2026, Altris partnered with Czech firm Draslovka for cathode production instead of building its own facility. The playbook that Northvolt pioneered, the one where you sign contracts, raise billions, and then figure out manufacturing, has been discredited.
Bruegel, the Brussels think tank, has proposed "derisking by embracing." The idea is that Europe should stop insisting on European ownership of battery production and instead welcome Asian manufacturers to build on European soil under European regulations. Location over ownership. It is a pragmatically defensible position. It is also an acknowledgment that the project Northvolt was funded to achieve will not be achieved by a European-owned company for the foreseeable future.
Lyten says NMC cell shipments from the restarted Skellefteå plant will begin in the second half of 2026. The Västerås R&D center and the Skellefteå factory, funded by European taxpayers, pension contributions, and the European Investment Bank, are now American-owned assets in a lithium-sulfur company's portfolio. Whether Lyten can operate a large-scale NMC production line remains to be tested. The physical infrastructure is there. Northvolt proved that having the infrastructure was not the part that was hard.
The IEA projects global EV battery demand past 2 TWh by 2030. Solid-state is at pilot stage. Sodium-ion is getting investment from CATL and BYD at lower energy densities. NMC and LFP lithium-ion will remain dominant through this decade. The batteries that European automakers need to stay in business will be made, in increasing volumes, inside Europe's borders. The factories producing them will mostly be owned and operated by companies headquartered in Ningde, Seoul, and San Jose.
