Northvolt's customers and the sale of its industrial battery business

analysisNorthvolt's annual reports name its customers in lists. The directors' report in the 2022 annual report states that the group's industrial partners and customers include ABB, BMW Group, Epiroc, Scania, Siemens, Vattenfall, Vestas, Fluence Energy, Volvo Cars and Volkswagen Group, without distinguishing customers from partners, and that the parent company's revenue mainly comes from the sale of lithium-ion cells to customers within the automotive sector. The same report puts the order book at USD 55 billion contracted in cell supply agreements, described as backlog revenue to be delivered over the next eight years, and counts 13 customer supply agreements at the end of 2022, against 10 in 2021. The 2023 annual report states that Northvolt was primarily delivering into the European automotive industry, with customers including Audi, BMW, Volvo Cars and Scania, and gives the order book at the end of 2023 as USD 53 billion, referring to it as 'over 50 billion' after a stricter definition of flex-volume assumptions. ^{1 2}

analysisThe 2022 report also records a related-party sale: during 2022 Northvolt sold SEK 0.01 million to Polarium Energy Solutions AB, a company with which it has a common shareholder, with receivables of SEK 0.013 million at year-end. ¹

analysisNorthvolt's 2023 annual report states that Northvolt also delivered lithium-ion battery systems for industrial vehicle segments, with customers including the Finnish lifting solutions and service provider Konecranes and the Swedish mining company Epiroc. Its 2022 annual report states that Northvolt Dwa in Poland continued to deliver battery systems to Epiroc in 2022, with a 96 percent year-on-year increase in the number of systems delivered. Media reported in March 2025 that the battery packs of Northvolt Systems Industrial had been sold since 2019 and were used on drilling rigs and in construction machinery such as forklifts, and that the business, with its main operations in Gdańsk, Poland, counted Epiroc and Konecranes among its customers. ^{1 2 3}

analysisA Question Period Note of Innovation, Science and Economic Development Canada, received on 29 November 2024, states that with the cancellation of a major contract with BMW earlier in 2024, Northvolt had been producing cells mostly for the truck maker Scania, as well as Audi and Porsche, all subsidiaries of its major shareholder Volkswagen Group. Media reported in November 2024 that BMW had cancelled an order with Northvolt worth billions because of delivery delays caused by production problems, and that the combination of cancelled orders and capital-intensive production ramp-up problems had put Northvolt in a difficult financial situation; the cancelled contract, its value and the stated reason are not documented in a contract record inspected. The debtors' first-day declaration, for its part, states that Northvolt had signed a long-term supply agreement with BMW in July 2020 for cells produced at Northvolt Ett, and that from 2023 it faced a series of challenges, including delays at Northvolt Ett, an inability to satisfy certain customer requirements and a downturn in the electric-vehicle industry, before announcing a strategic review in early 2024 and refocusing on accelerating production at Northvolt Ett while halting development efforts elsewhere. The November 2024 media report also stated that Scania, a Traton brand that had wanted to source all battery cells for its electric trucks from Northvolt, was reportedly looking for alternative suppliers. That was a second-hand account, and the records inspected contain no statement by Scania on the point; according to the debtors' first-day declaration Scania later provided debtor-in-possession financing in the Chapter 11 cases, and according to a media report of 12 March 2025 it agreed in February 2025 to buy the industrial battery pack business; the bankruptcy trustee said in August 2025 that enormous support from Scania had allowed production in Skellefteå to resume temporarily in spring 2025. ^{1 2 3}

analysisThe same Canadian note records the operational background. On 9 September 2024 Northvolt announced initial steps to streamline its global operations to slow cash outflows, focusing resources on battery cell manufacturing capacity and halting a battery materials project in Borlänge, Sweden, and until as recently as mid-November 2024 operational and quality issues had led the company to miss its internal weekly production targets consistently. ¹

analysisAccording to a declaration by a Teneo senior managing director filed in the Chapter 11 cases on 4 March 2025, the debtors engaged an investment bank in September 2024 to market the Primary Systems Businesses. They identified at least sixty-eight potential purchasers, sent fifty teasers, held substantive dialogue with twenty-nine parties and signed non-disclosure agreements with twenty. Three non-binding offers were received in October 2024, two for the Industrials Business and one for the ESS Business; two bidders later dropped out, and after materials were prepared for the boards of Northvolt AB and Northvolt Systems AB, the remaining purchaser and the debtors signed a non-binding term sheet for the Industrials Business on 11 December 2024. The declaration parts inspected refer to the buyer only as 'the Purchaser'. ¹

analysisA competing offer arrived at the end of December. According to Emma Nehrenheim's declaration of 4 March 2025, the debtors received an unsolicited non-binding offer from a consortium of third parties on 30 December 2024 for most of the Primary Systems Businesses, whose cash consideration Nehrenheim understood to be higher than that of the proposed sale. After data-room access from around 2 January 2025, the consortium submitted on 7 February 2025 a revised bid for the combined ESS and Industrials businesses that significantly lowered the cash consideration, and the debtors determined that the purchaser's bid was higher or otherwise better. The members of the consortium are not named in the declaration parts inspected. Nehrenheim, President of Northvolt Battery Systems and Materials, stated that the revised bid was neither feasible nor credible enough to prefer because the consortium required at least six to eight more weeks of diligence, submitted no questionnaires and only three of its four members with data-room access opened it, viewing six, sixteen and sixty-three of more than 1,000 files, and that the sale to the purchaser would preserve about 300 jobs and reduce the debtors' exposure to a non-core business accounting for most of the systems subsidiaries' cash burn. These are Nehrenheim's assessments in support of the debtors' sale motion; the records inspected contain no response from the consortium. ¹

analysisAccording to declarations filed in the Chapter 11 cases on 4 March 2025 by a Teneo senior managing director and by Emma Nehrenheim, the share purchase agreement for the sale of 100% of the ownership interests in Northvolt's Industrials Business (industrial battery systems) provided for a cash purchase price of $6 million before closing adjustments, representing an enterprise value of $6 million, in addition to an estimated $11.6 million of liabilities assumed by the purchaser: about $8.5 million related to the negotiated Epiroc Settlement Agreement, $2 million to accrued holiday pay of transferring employees and $1.1 million to future warranty claims. Nehrenheim's declaration states that the assumed liabilities include the Epiroc Claim, which consensually resolves and settles all outstanding disputes between Epiroc and the debtors and was to be assumed and assigned to the purchaser under the Epiroc Settlement Agreement, which the debtors asked the court to approve together with the sale; the nature of the underlying disputes is not described in the parts inspected. The declarations identify the buyer only as 'the Purchaser', whereas a media report of 12 March 2025 names Scania, and they also count an estimated $14.6 million of avoided wind-down claims and costs as part of the sale's value. ^{1 2}

analysisThat figure is an estimate. A senior managing director of Teneo Financial Advisory estimated, in a declaration submitted on behalf of the debtors on 4 March 2025, that the sale of the Industrials Business would avoid about $17.2 million of potential supplier claims (about $2.7 million), customer claims (about $3.2 million), lease-break damages (about $5.4 million) and employee severance in Sweden and Poland (about $5.9 million), against about $2.6 million of sale-related costs for the required purchase of intellectual property from Northvolt AB and information technology separation, giving net avoided claims and costs of about $14.6 million. The estimates were prepared from data provided by the debtors' management team and exclude about $300,000 of cure and other costs related to historical contractual obligations. ¹

analysisMedia reported on 12 March 2025, the day Northvolt filed for bankruptcy, that Northvolt had said in February 2025 that it agreed to sell its battery pack business Northvolt Industrial for $6 million in cash to Scania, one of its largest customers and owned by Traton, with Scania taking over all debt and liabilities of the business, and that a Scania spokesperson said the truckmaker still intended to buy the business at the originally agreed price. The report, which cites Northvolt statements, a February filing in the US bankruptcy court and the Scania spokesperson, adds that an unknown consortium had made a higher bid for more assets, which Northvolt did not accept because the consortium needed longer for due diligence and Northvolt needed cash urgently; that a court hearing set for 10 March 2025 that could have led to the takeover had been postponed indefinitely; and that, after the bankruptcy filing, asset sales were suspended and the bankruptcy trustee would talk to Scania and other suitors. The Chapter 11 sale declarations refer to the buyer only as 'the Purchaser' and estimate the assumed liabilities at $11.6 million. A Northvolt spokesperson was quoted as saying the company wanted to deliver the transactions negotiated to date, while the Scania spokesperson declined to comment on the possibility of a third party starting a bidding war, calling it speculative. On 22 May 2025 the bankruptcy trustee said that a sale had already taken place for part of Northvolt Systems AB's business, without naming the part, the buyer or the price, and a Polish business-information service's machine-generated summary of Northvolt Poland's 2024 accounts says one sale of an organised part of the enterprise was completed in April 2025 and a second was in progress; the records reviewed do not show whether either was the sale to Scania. ¹