The struggles of Northvolt, born to be a beacon of European ambition in battery production, have reached a critical point. Following significant setbacks, including filing for Chapter 11 bankruptcy in the U.S. and losing major investors like BMW, the Swedish battery manufacturer may now be in talks with China’s CATL, the global leader in battery production, to avoid total collapse.
According to Sweden’s Dagens Nyheter, negotiations between Northvolt and CATL have been ongoing since the summer. Meetings reportedly took place at CATL’s headquarters in Ningde, China. If the deal materializes, it would mark a significant shift in the European battery market, undermining efforts to establish independence from Asian dominance in this critical sector.
What Europe aims to be, and what really is
CATL, which holds nearly 40% of the global market share for electric vehicle batteries, has a formidable presence in the industry. Its batteries power vehicles from companies like Geely (including Volvo and Polestar) and Audi. While Volkswagen, which owns a 27% stake in Northvolt, initially sought to rely on the Swedish company for its battery needs, persistent delays and delivery issues led many automakers to reconsider their partnerships.
Northvolt’s outgoing CEO, Peter Carlsson, previously hinted at exploring Asian alliances to navigate the company’s financial turmoil. However, a partnership with CATL, though potentially a financial lifeline, raises critical questions about Europe’s autonomy in the EV battery supply chain. Such a move could provide CATL with direct access to European manufacturing facilities and natural resources, including Sweden’s mineral reserves, which are essential for battery production.
CATL’s expanding European footprint
CATL has long shown interest in strengthening its position in Europe. The company is already expanding its manufacturing capabilities in Hungary and exploring battery recycling operations on the continent, according to reports by Bloomberg News. A collaboration with Northvolt would further cement its dominance, offering a platform to meet the growing demand for EV batteries in Europe.
For Northvolt, the partnership could mean survival—gaining access to CATL’s advanced technologies and global network. For CATL, it represents an accelerated path into the European market. However, critics argue this would reduce Northvolt to a subsidiary of the Chinese giant, eroding Europe’s vision of building a self-sufficient battery industry.
