The European Commission is challenging its nascent EV battery sector with a hefty €1 billion ($1.05b) hike. But companies that rely on Chinese goods are likely to be cut off. The question is, is it too late to save Northvolt?
This new proposal is one of the first new measures to be presented in the first week of the new term of the EU Commission, and is part of a large package of 4.6 billion euros aimed at increasing net-zero technology, the production of EV batteries, and renewables. hydrogen.
“All three calls include new sustainability measures to improve European industry,” said Teresa Ribera, the new vice president of the commission in charge of clean reforms. “The calls for batteries and the hydrogen bank auction will also include some mechanism to protect Europe from dependence on a single supplier.”
Companies interested in applying for funding have until April 24, 2025 to do so, and those who will receive funding must have an agreement signed by the first quarter of 2026. At the moment, the EU Commission does not say what the maximum amount of money will be for each project.
As Europe's “green dream” Northvolt has been bleeding for months, this move seems to be accompanied by difficulties in the sector. The commission said that “multiple tools are needed to overcome some of the economic barriers that the battery value chain in Europe, including gigafactories, is currently facing. The Commission will continue to deploy existing tools and engage in new ways, including in the short term, to address barriers to the growth of large industries. ”
All of this enthusiasm is fueled by the idea of reducing dependence on China by creating green EV batteries using 100 percent recycled nickel, manganese, and cobalt. But at this point, it is not certain that these funds will arrive in time to save Northvolt.
Northvolt filed for bankruptcy protection in the US after the rescue package failed, leaving the battery maker with only one week's worth of cash in the account. Founder and CEO Peter Carlsson, who led the costly expansion, also recently stepped down. The Swedish-owned battery maker has filed for Chapter 11 in the Southern District of Texas, with $5.8 billion in debt. Today, Reuters reports that Northvolt now wants to sell its business at the end of the year, a devastating loss for what was one of the most heavily financed startups in Europe and the recipient of the largest loan-even green in the EU.
Of course, other battery makers have hit hard times, including the Stellantis-backed Automative Cells Company, which has halted construction of factories in Germany and Italy. Volkswagen also recently canceled its plans to build battery factories in Europe and North America.
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