The auto industry has been under tremendous pressure lately, juggling economic challenges, supply chain issues, and the costly shift to electric vehicles.
For Volkswagen, these struggles have become even more complicated. Its investment in the Swedish battery maker Northvolt — a company facing mounting financial troubles — now hangs in the balance, according to Boosted.
Volkswagen, which owns 22% of Northvolt, risks losing €1.47 billion (£1.27 billion) if the company goes under.
Despite being its largest shareholder, the automaker has reportedly decided to step back from discussions about further funding.
According to sources cited by Affärsvärlden, Volkswagen no longer plans to inject additional money into the battery manufacturer.
Investment Would Vanish
This move might raise eyebrows, considering the stakes involved. Volkswagen has already invested a hefty sum, along with an additional €94 million (£81 million) in convertible bonds.
If Northvolt were to collapse, those investments would vanish. And the warning signs are hard to miss—one of Northvolt’s subsidiaries has already filed for bankruptcy.
The company’s struggles appear to be escalating. Last week, Volkswagen’s representative resigned from Northvolt’s board, though the automaker insisted that its ownership remains unchanged.
A spokesperson’s curt response—“Volkswagen has no further comment”—did little to clarify the situation.
What’s next for Northvolt is uncertain. A restructuring seems likely, if not essential, to save the company. Even its founder has stepped down as chairman, though he continues to serve as CEO.
The trouble started earlier this year when BMW tore up a contract worth €1.88 billion (£1.62 billion). Soon after, doubts arose about Volkswagen’s own agreements with the company.
Since then, Northvolt has faced a string of misfortunes, from fatal accidents to rumors of sabotage. In October, the company narrowly avoided bankruptcy over unpaid taxes.
