Norsk Hydro has acquired the remaining shares of Hydrovolt from Northvolt for 78 million Norwegian crowns ($6.79 million), making Hydrovolt a wholly-owned subsidiary. This move comes as Northvolt faces significant financial challenges, including a recent Chapter 11 bankruptcy filing and the need for urgent cash flow.
Key Takeaways
- Northvolt sells its last shares of Hydrovolt to Norsk Hydro for $6.79 million.
- Hydrovolt is now fully owned by Hydro, which plans to seek new partners for future development.
- Northvolt is under financial strain, having entered Chapter 11 bankruptcy protection in November 2024.
- The deal is subject to court approval as part of Northvolt’s bankruptcy proceedings.
Northvolt’s Financial Challenges
Once considered a frontrunner in the European electric vehicle battery market, Northvolt has struggled with production issues, the loss of key contracts, and a severe funding crisis. The company filed for Chapter 11 bankruptcy protection in the U.S. in November 2024, citing a lack of cash flow to sustain operations. At the time of filing, Northvolt reported having only about $30 million in cash, which was expected to last just a week.
Hydrovolt’s New Ownership
With the acquisition of Hydrovolt, Norsk Hydro aims to leverage the recycling aspect of the business, which aligns with its core operations in aluminum production. Hydrovolt specializes in recycling end-of-life batteries, a process that is increasingly important as the demand for sustainable battery solutions grows. Hydro has indicated that it views Hydrovolt differently from its other battery ventures, emphasizing the synergy between battery recycling and its existing operations.
Future Plans for Hydrovolt
Hydro has expressed intentions to seek new partners to help develop Hydrovolt further. The company believes that collaboration could enhance the recycling process and expand its market reach. Despite acquiring full ownership, Hydro does not plan to remain the sole owner indefinitely, indicating a strategic approach to growth and partnership in the recycling sector.
Northvolt’s Shift in Focus
As part of its restructuring efforts, Northvolt is shifting its focus back to its core competency: battery cell production. The company has divested from several joint ventures and non-core businesses, including its on-site battery materials recycling unit, Revolt. Hydro has stated that it is not interested in acquiring this particular unit, as it does not align with its strategic direction.
Conclusion
The sale of Hydrovolt marks a significant shift for Northvolt as it navigates through financial turmoil. With Hydro now at the helm of Hydrovolt, the future of battery recycling in the region may see new developments, especially as the automotive industry increasingly prioritizes sustainable practices. Northvolt’s upcoming court proceedings will be crucial in determining its path forward as it seeks to stabilize its operations and attract new investment.