10 mths ago EU splurged $1bn on 'Green Deal' company that just filed for Chapter 11 bankruptcy protection

Will UK’s Ed Milliband ignore the ‘Road Closed’ signs and keep his foot down on the Green pedal?

Montage © Facts4EU.Org 2024

EU’s Electric Vehicle plan misfires on all cylinders, as its battery-maker becomes insolvent

On Thursday last week the EU’s ‘Green Deal’ plans were driven to the cliff-edge when its great hope Northvolt, the EU’s totemic maker of batteries for electric vehicles (EVs), filed for Chapter 11 bankruptcy protection in the US, and its Swedish CEO resigned. This has dealt a major blow to the EU’s No.1 policy priority : its ‘Green Deal’.

It was only 10 months ago that the EU Commission was trumpeting its support for Northvolt, via the European Investment Bank. Here is their headline from 16 January 2024.

10 months ago the EU was crowing about "the biggest green debt deal in Europe"

“The lending package is part of a $5 billion non-recourse project financing, the biggest green debt deal in Europe to date, and will support expansion of Europe's first circular battery production gigafactory, Northvolt Ett, in Skellefteå, Sweden.”
“The European Investment Bank (EIB) will finance Northvolt's gigafactory in Northern Sweden, with a total lending package to slightly over $1.038 billion (€942.6 million). The financing is an important part of the $5 billion debt financing raised for the expansion of the gigafactory in Skellefteå, announced today. The expansion is expected to increase the annual output capacity for battery production to up to 60 GWh. The deal is the largest green loan raised in Europe to date and will facilitate the creation of a fully integrated circular battery production facility that has not previously existed outside Asia.”
- European Commission, 16 Jan 2024.

And here is what von der Leyen’s Commissioners said at that time:

“We mean business when it comes to Europe's battery industry. It is of strategic importance and a key battleground for global competitiveness. Northvolt, our battery pioneer, showcases that the EU has what it takes to build an innovative, sustainable and globally competitive battery ecosystem. I am proud of Northvolt's success story as well as of other 160 industrial projects taking shape across the entire value chain, while promoted under the European Battery Alliance.”
“We need to be strategic, bold, agile.”
- Commission Executive Vice-President Maroš Šefčovič, Post-Brexit negotiator with the UK, and in charge of the European Green Deal and the European Battery Alliance, 16 Jan 2024.

Only 10 months later the EU’s battery-maker Northvolt has run out of charge

The quotes we have included above show just how much the EU Commission was crowing about this new ‘Wunderkind’ which was supposed to take on the might of US, Chinese and other Asian companies. Sadly, Northvolt is now in deep trouble, only months after the EU invested over $1 billion of its citizens’ money.

As with all multinationals, Northvolt’s financial structure is very complicated, with subsidiaries and various ‘agreements’ across country borders. Some parts of it are not included under the bankrupcy filing it made under Chapter 11 in the States last week. That said, the CEO himself has admitted that Northvolt needs another $1+ billion just to keep afloat.

Will Ed Milliband now wake up and smell the (‘Fair Trade’) coffee?

Iconic German brands such as Volkswagen are closing factories for the first time in their long history. The BMW, Porsche, and Audi brands are also in trouble, scaling back production and reducing orders for important EV components such as batteries.

Meanwhile in the UK, car manufacturers are now in crisis talks with Ministers over the 18% EV market share, compared to the Government’s target this year which is 22%. UK motor manufacturers will be fined £15,000 per excess internal combustion engine-powered vehicle which is sold. If this government rule isn’t reversed very quickly, it will no longer be economical to make cars in the UK at the current scale.

'Faster, faster'

Despite this, it seems that the Government’s ‘Secretary of State for Energy Security and Net Zero’, Ed Milliband, is determined to press on at even greater speeds towards his Net Zero goal, just as most EU countries are realising it is unachievable in the timetables they have set themselves. Furthermore, right across Europe ordinary people are turning against this, as can be seen in recent election results.

Click for full photo, including Conservatives' Michael Gove

Here was another EU Vice-President (yes, there are lots of them) in January

“With backing from the European Commission, the EIB has supported Northvolt from the very beginning, starting with the demonstration line in Västerås in 2018, and continuing with the first phase of the gigafactory in Skellefteå. We recognised Northvolt's potential and importance for the energy transition and have supported them on our way to becoming the EU climate bank.
“We should not underestimate the importance of this type of project in reaching Europe's climate neutrality, and now we're glad to continue our support for the expansion.”
- EIB Vice-President Thomas Östros, 16 Jan 2024.

Here is what the Company said last week

“Northvolt AB and certain of its subsidiaries (“Northvolt”) voluntarily filed for Chapter 11 reorganization in the United States. By enabling the company to restructure its debt, appropriately scale the business to current customer needs and secure a sustainable foundation for continued operation, these Chapter 11 filings will help Northvolt to implement the decisions made as part of its strategic review to rescope the business and prioritize commitments to customers.
“Northvolt will continue to operate as usual during the reorganization, similar to other international companies that have used the Chapter 11 process to reorganize their financial obligations. The company will continue to make deliveries to customers, while fulfilling obligations to critical vendors and payment of wages to employees. The Chapter 11 restructuring process in the U.S. is distinct from a bankruptcy or administration proceeding in Sweden or many other countries.”

- Northvolt AB, Stockholm, Sweden, 21 Nov 2024

Observations

As the old saying has it, “When Germany sneezes, the rest of the EU catches a cold.” In the case of the automotive industry this is particularly true. Germany dominates, and when its leading car manufacturers and ts economy are in trouble – which they both are – the whole of Europe feels it. This also impacts the UK, as Germany is an important export market for British companies.

For some time now, the cold, harsh winds of economic reality have been pressing down hard on the brake pedal for Ursula von der Leyen’s top priority when she was appointed EU Commission President in 2019. Her ‘Green Deal’ – for which she had no mandate - was trumpeted as the Commission’s No.1 priority over the last five years. Now, as she enters her second term as President – unelected by any popular vote from the people of the EU – she faces an embarrassing ‘volte face’.

Finally and in a note of delicious irony, (quite common when we are reporting on the EU), Europe's biggest EV battery-maker had to use US law to file for bankruptcy protection. Oh, you couldn't make this up....

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Reader Comments 16

1. Ashley Great Britain , Monday, November 25, 2024, 07:41:

Wasting 1000 million dollars on a failing technology is madness.
The EU and UK are truly being run by blinkered crazed menaces and its harming all of us.
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Large scale battery vehicles will never dominate the market.There's an inherent problem with batteries, they need to be charged from an external source, and the cells rapidly deteriorate with hard use and cold temperatures. Soon there will be EV's sitting around useless because people can't afford to replace the battery bank.
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Of course we need to stop polluting the world but we also need to get around. 100% Electric vehicle power is not the answer.
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Yet another EU company on the ropes.

2. terence patrick hewett , Monday, November 25, 2024, 07:55:

The EU has bid 6 no Trumps, with very little in their hand.

3. Have You Wondered , Monday, November 25, 2024, 08:05:

.
€1bn - 10 months - where was due diligence - in anybodys book begs the fraud question?
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How much has that cost each and every constituent of the EU?
.
Remember this episode every time you travel and obliged to pay EU Emissions Trading System (ETS) Unless you have a private yacht or jet !
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Why does the UK (or any other nation) need another level of corruption and malfeasance above that which the UK has already?
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Afterthought - Have You Wondered if the EU members will start a petition to denounce its hierarchy?
.

4. Ashley Great Britain , Monday, November 25, 2024, 08:12:

Splitting water to make hydrogen can be made safe and powerful to fuel vehicles. They would cost the same as oil based fuelled engine's and last longer. The range would be the same or further only limited by the size of the water tank. Using distilled water, only water Vapour would be the exhaust by product.
They have been able to make safe engines that run on water for decades. Of course governments would loose out on revenue. They don't want you just putting distilled water in your car at home. So there it is! There is a safe, practical, low cost solution to vehicle power but they prefer profit over actually saving the planet.

5. Have You Wondered , Monday, November 25, 2024, 08:19:

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Any coverage in the European mainstream Press?
.

6. LuxuryBalloon , Monday, November 25, 2024, 12:50:

1,432 days since NI became a colony of the EU.

7. Northern Muppet , Monday, November 25, 2024, 12:52:

The whole Net Zero thing has always struck me as being a bit daft.
.
From silly windmills that trash our beautiful landscape, to cars that are clearly unsuitable for most people, to building new airports in areas like the Seychelles that the nutjobs claim will be underwater within about 18 months - it has always just seemed a bit of a scam.
.
I have a very horrible feeling that China will come out of the whole situation as the world's dominant power, and we will have given up any advantage that we in the west have ever had. And we will have done this voluntarily!!!
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Once a single-party, authoritarian state has power over the rest of the globe, we'll be in very, very big trouble.
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Somehow, I don't think Bonkers Ed Millibrain's place in history is going to be in any way positive!!!

8. Northern Muppet , Monday, November 25, 2024, 13:33:

And as if I needed something to illustrate my point, here's an article about WHY electric vehicles are just NOT fit for purpose.......
.
.[LINK DELETED]
.
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For a short time, my wife had a hybrid car that we once took when we stayed in a hotel. I looked at the price for the hotel chargers, and they were MORE EXPENSIVE per mile than just putting petrol in. Now I hear the argument about the damage to the environment from petrol engines, even if I don't believe it; but that Volvo XC40 wasn't very good on its petrol motor, but it was still chaper than plugging the rotten thing in!! Senseless!

9. Sparky , Monday, November 25, 2024, 15:37:

8 NM. Surely you can't take these reports seriously. I was intrigued and followed the link to open an image of Teslas that you couldn't see the number plates of, judging by the bus stop sign is not in the UK, no idea how old or what circumstances the picture was taken and then the pic goes on to talk about how envious the reporter looked at the empty Tesla charges in a piece with a photograph of a queue of Teslas. Best look to the BBC if you want some truth.

10. Gazzablack , Monday, November 25, 2024, 18:48:

9, sparkless
.
That's the last place you should look.

16 comments, page 1 of 2

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