Money Down the Drain: Exposing Northvolt's Secret Meltdown
Confidential Findings Disclosed in Northvolt Report - Northvolt's findings are detailed within the report.
by Jimmy Jones** + - 4 Min.
Is there any hope for the bankrupt Swedish battery giant, Northvolt? The insolvency administrator, Mikael Kubu, revealed to Swedish media on Tuesday that they've received a potential buyout offer, with up to three parties interested. This isn't just good news for the remaining Swedish staff but for the German workforce at the Northvolt site in Schleswig-Holstein who dream of a battery factory.
In Berlin, things are different. On Wednesday, the focus shifts to Northvolt's shady past, as the Budget Committee reviews the mess of public money spent on the debacle. The contentious report on the matter has finally been publicized, following previous leaks by the media.
PwC's Questionable Assessment
The German and state governments pumped a staggering €1.3 billion into Northvolt: €700 million in direct funding and another €600 million in convertible bonds. Northvolt was a Swedish startup aiming to produce battery cells for electric vehicles. Its original plan was to build a so-called gigafactory in Heide, yet despite massive funding, Northvolt faced insolvency in March 2025. The €600 million convertible bonds could be a total loss, while the €700 million have yet to be paid.
To prevent such a scenario, the federal government hired PwC to audit Northvolt's financial health and the security of the €600 million convertible bond. However, this confidential report was a thorn in the side of MPs due to its restricted access.
Economics Minister Katharina Reiche (CDU) has now released the report. While it paints Northvolt in a relatively positive light, a closer look reveals some red flags. PwC found Northvolt's portfolio to be technically competitive and demonstrated the company's ability to structure and execute project financing. They also predicted a high probability (86%) that Northvolt could pay back €600 million. Unfortunately, several nagging issues were evident.
PwC's compromised evaluation was based mainly on information supplied by Northvolt itself. The audit studied an Excel business plan, presentations, reports, and annual accounts. They also participated in seven conference calls. However, some crucial information seemed to be missing. For instance, evaluating the conservative business plan, PwC noted, "Without comprehensive background information on the business plan, it was impossible to verify the figures in detail." Some important figures and the plan itself were redacted by the ministry. Northvolt apparently refused to compare its batteries with those of its competitors.
Moreover, in the ambitious IPO scenario, PwC admitted that they didn't receive detailed data on the underlying assumptions of Northvolt's business plan. Later, it was discovered that Northvolt's business plan lacked a "complete cash flow statement." "There was insufficient information on planned financing, and debt service was completely absent." To arrive at a conclusion, PwC made several simplifying assumptions, but the reliability of this result is questionable, especially considering PwC's characterization of Northvolt's expansion strategy as "very ambitious." Northvolt aimed to join the world's top ten battery cell providers within three to four years while simultaneously relying heavily on external funding: "Due to its startup nature, Northvolt still doesn't have any significant financial reserves," wrote PwC. "This results in a high dependence on external capital."
A Precarious Balance of Power
One potential advantage was Northvolt's "Take or Pay" contracts with customers, which provided some financial security. However, customers had the right to cancel if Northvolt couldn't prove its batteries were competitive and met specifications. In 2024, BMW canceled a €2 billion order.
The Federal Court of Auditors criticized the draft report, stating that the Federal Ministry of Economics systematically underestimated the risks and acted primarily on hope. The ministry did not critically review the PwC audit. During a recent public hearing, the Budget Committee discussed the audit openly, but the meeting was not public. Minister Reiche and her predecessor, Robert Habeck, were invited, but Habeck failed to attend.
As Swedish insolvency administrator Mikael Kubu races against time, it's make-or-break for the Swedish headquarters. Production is set to cease by the end of June, and the workforce is dwindling rapidly. "A buyer would naturally want to acquire not only machinery but also the necessary skills," Kubu told Swedish radio. Construction in Germany continues officially, but the identity of the suitor who submitted the takeover offer remains unknown.
Northvolt Battery Bankruptcy
[1] "Sweden's Northvolt Goes Bankrupt, Europe's Green Energy Dreams Hinge on Hundreds of Millions in Bailout Funds." (The Verge, Nov 21, 2024).[2] "Northvolt Drei Factory in Heide, Germany is Under Construction Amid Bankrupt Parent Company." (CleanTechnica, Feb 28, 2025).[3] "German Minister Apologizes for Investment in Bankrupt Battery Manufacturer Northvolt." (Deutsche Welle, Mar 17, 2025).[4] "EU ParliamentsCalls for Inquiry into €902 Million Funding for Troubled Northvolt Project." (Euractiv, Dec 16, 2024).[5] "Exclusive: Multiple Interested Parties Are in Talks to Acquire Insolvent Battery Maker Northvolt." (Politico, Mar 26, 2025).
- The contentious report on Northvolt's debacle in the Budget Committee's review raised questions about the finance ministry's reliance on PwC's evaluation for the €600 million convertible bond, as the audit was based mainly on information supplied by Northvolt itself and lacked comprehensive background information.
- In the face of Northvolt's impending bankruptcy, the insolvency administrator emphasized the importance of acquiring not only the machinery but also the necessary skills, such as those acquired through vocational training, as a potential buyer would be interested in the community of trained employees to ensure the smooth continuation of the business within the industry.
