The battery factory Northvolt in Skellefteå is putting the production of so-called cathode material – an important part of battery production – on hold. The material can be purchased elsewhere, including from China, which is the largest in both electric cars and battery production in the world.
"Overcapacity prevails"
If you look generally at the battery market, you can say that the plans to set up capacity wildly exceed demand, there is overcapacity. This also means that there is quite tough competition, says Hampus Engellau, automotive analyst at Handelsbanken.
Among other things, BMW has withdrawn from a larger commitment with Northvolt, which affects the Skellefteå factory.
At the same time, the entire Western world has become aware of the dependence on China and Chinese components in car manufacturing. Both Europe and the USA want to have their own battery industry, he notes.
"Too ambitious plans"
But the fact that the capacity that follows from the plans to build battery factories far exceeds demand over the next ten years does not mean that Northvolt cannot be competitive and successful in the future. Many of the plans may not come to fruition, for example.
I think Northvolt's problem is that they may have had slightly too ambitious plans, that they may have wanted to take too many big steps at the same time.
At the same time, electric car sales have slowed down.
Almost all electric car sellers who had targets for how many cars they would sell in 2025 or 2030 have backed down from that, due to the lack of demand from consumers, says Hampus Engellau.
