Swedish pension funds with large investments in ailing unlisted green battery company Northvolt say they are in talks with the firm — which is now having to cut its workforce and sell off parts of the company due to a cash shortage.
Some of the biggest Nordic pension funds are heavily exposed to the climate transition play, having backed it financially from 2019 onwards.
Investors had high hopes the start-up would play a key role in the growth of the electric vehicle (EV) market, with the development of its flagship factory in Sweden’s Skellefteå set to become Europe’s first large-scale factory for the manufacture and recycling of sustainable batteries.
However, problems at the factory and slowing plans by European carmakers’ move to EVs have since hit Northvolt hard.
The four big buffer funds behind Sweden’s state pension, AP1-4, jointly own 3.5% of Northvolt, while Denmark’s statutory pension fund ATP holds a 5.3% stake.
Swedish blue-collar pension fund AMF has invested around SEK1.9bn (€166m) of its money in the firm, with Folksam exposed at around half that level.
The four AP funds hold their SEK6bn (€525m) investment in Northvolt via their joint company 4 to 1 Investments, which is chaired by AP4 head of alternative investments Jenny Askfelt Ruud.
Asked to comment on the investment today, Karoline Hammar, head of communications at AP4, told IPE: “Since the company is in a challenging situation and having ongoing dialogues with investors, we are not doing any interviews.”
Kajsa Moström, head of group media relations at Folksam, told IPE that the pension and insurance group was following Northvolt’s situation closely.
“The company has talked about the challenges it faces and has communicated its plans to deal with them.
“We are in continuous contact with Northvolt. At this time, we cannot provide further comments,” she said.
On Monday, Northvolt announced the initial outcomes from its strategic review.
“In streamlining operations, Northvolt will initially focus on large-scale cell manufacturing whilst reducing costs and exploring future strategic partnerships for the purpose of securing its position in the global battery landscape,” the firm said.
Peter Carlsson, Northvolt’s chief executive officer and co-founder, said the company was having to take some tough action to secure the foundations of its operations, to improve its financial stability and strengthen operational performance.
“While conditions at this time are challenging, there remains no question that the global transition towards electrification — and the long-term outlook for cell manufacturers, including Northvolt — is strong,” he said.
The Northvolt board has decided to cut costs at Skellefteå by halting some operations, and to axe its Northvolt Fem programme in Borlänge, Sweden, on the Kvarnsveden site, selling that site which it bought in 2022.
The firm also said it was trying to find partners and investors to shore up its facility in Gdańsk, Poland, and – as already announced – move to integrate its California subsidiary Cuberg and lithium-metal technology into its Swedish operation, Northvolt Labs.
Northvolt said it would need to cut jobs, and was in talks with trade unions.
AMF, Northvolt’s nineth largest stockholder with a 2.8% stake, takes a positive view of the action the company is taking.
“Given the circumstances, it is good that Northvolt is taking measures they deem necessary to secure the ability to produce batteries and earn money, and in the long run start to generating returns for us as owners,” Jens Söderblom, AMF’s head of press, told IPE.
“It is not our role to have detailed views on the operational work, but we of course follow the development carefully, and await more information from the company as well as the major owners, and other stakeholders, regarding the process going forward,” he said.
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