Northvolt suspected of manslaughter in latest blow to flailing battery startup

Swedish prosecutors are set to serve Northvolt with a suspicion of gross manslaughter notice following the death of a worker at the EV battery-maker’s struggling gigafactory in the country’s icy North, the Financial Times reports. 

Environmental prosecutor Christer B Jarlås told the paper that officials will deliver the formal notice in the coming weeks, which indicates Northvolt is under investigation for possible legal responsibility in the incident. 

The notice pertains to a 25-year-old Northvolt employee who died on December 15 after suffering severe burns sustained during an explosion on a production line at the startup’s megaplant in Skellefteå a month prior. 

In a separate incident on December 15, a construction worker was killed and another injured when a fork stand fell on them during the building of a concrete foundation for Northvolt’s factory expansion. 

Northvolt temporarily halted production at the plant following the deaths, which exacerbated existing delays that particularly affected deliveries to Scania, the Swedish truck maker.

Swedish police also opened an investigation in June over the mysterious deaths of three workers at the factory, who all died in their sleep after working at the plant. Initial police investigations concluded the deaths were not linked. Northvolt called them a “tragic coincidence.” Toyota temporarily pulled its workers from the factory following the fatalities. 

Battery boom to bust? 

The looming court case is the latest blow in a difficult year for Northvolt, which is facing liquidity issues as it struggles to ramp up battery production amid cooling EV sales and stiff competition from Chinese battery makers.

Peter Carlsson, a former Tesla executive, co-founded Northvolt in 2016 with the aim of building Europe’s leading lithium-ion battery manufacturer. The company has secured a whopping $15bn in debt, equity, and government funding since then, and has been the cornerstone of the continent’s attempts to catch up with the US and China in battery cell production.   

However, in recent months Northvolt has laid off a quarter of its workforce, scrapped plans to build a new factory in Borlänge, Sweden, closed down its R&D hub in San Francisco, paused production of new cathodes, and sought a buyer for its energy storage business. In June, BMW canceled a $2 bln EV battery supply contract with Northvolt, which has struggled to meet demand from automakers. 

Europe’s most valuable startup needs a lifeline but at this stage it’s uncertain where that will come from. This month, Sweden’s prime minister ruled out a state bail-out of Northvolt, saying it was up to private investors and the company to solve matters.

According to Bloomberg, a group of Northvolt lenders is set to meet today to consider whether to extend support or cut their losses and risk losing billions. Their verdict could prove critical to save Northvolt from going from Europe’s battery posterchild to a financial heap of scrap metal — and lithium.