🌍 Northvolt charges south #224

Happy Monday!

While Turkey is on the menu for some this Thanksgiving, for climate tech its Northvolt that's taking the heat. This week we look at what went wrong in Europe’s soon to be cautionary tale, from production issues to safety failures, and what it means for European batteries, cars, and climate investments.

In deals there’s $500m for clean infrastructure for data centres, $125m for spherical tokamaks and powerful magnets, and $100m for PV module development and manufacturing.

In other news, COP29 comes to a disputed end, Trump picks Wright as energy secretary, and permitting reform gets attention in Massachusetts and Washington.

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Also, we’re hosting a client webinar on December 5th on Trump 2.0, appointees, and what it means for climate tech. If you’re a Sightline client, please join us for analysis and Q&A with the Sightline Research team. Register here.

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Northvolt files for bankruptcy

What happened

Swedish battery manufacturer Northvolt ran out of charge and filed for Chapter 11 bankruptcy in the US last Thursday, the 21st. The company, which raised over $15bn from investors including Volkswagen, Goldman Sachs, and BlackRock, is left with just $30m in cash. Shortly after the bankruptcy announcement the CEO, Peter Carlsson, resigned. Northvolt had been struggling with a range of issues:

Production shortfalls. Its flagship Skellefteå gigafactory operated at less than 1% capacity due to faulty machines, inexperienced staff and what turned out to be unrealistic ambitions including building high quality cells at scale - a known challenge in the industry.
Lost major contracts. Northvolt lost a €2bn ($2.1bn) deal with BMW to Samsung after missed deadlines and quality concerns, underscoring operational deficiencies.
Leadership instability. Reported management issues and disorganized processes eroded confidence internally and externally, exacerbating employee turnover and slowing decision-making at a critical time.
Safety issues. Since 2021, Northvolt has recorded a number of accidents, and three deaths, prompting regulatory scrutiny and an investigation on suspicion of gross manslaughter following one death resulting from severe burns at the Skellefteå factory.

Why it matters

Northvolt’s near-collapse exposes systemic flaws in Europe’s green tech strategy and its struggle to compete globally in battery manufacturing.

Europe fails to charge ahead. Making batteries is hard. China and Korea took years to develop the know-how, the supply chains, and equipment needed. Lacking these elements domestically, Northvolt became heavily reliant on Chinese suppliers, such as Wuxi Lead Intelligent Equipment, to fix any issues. With the recent historic roles inverted, Europe has taken note and is copying China's former strategy. Ahead of inviting bids for a new €1bn ($1.1bn) in grant funding for batteries, Europe last week announced new plans to require technology transfer from Chinese companies.
Friends close, enemies closer. Strategic investors and corporate incumbents played a huge role in Northvolt’s rise and fall. Its early partnerships with Volkswagen and BMW contributed to Northvolt’s celebrity status, but cracks started to show when the BMW contract fell through. Samsung eventually won that contract, highlighting the challenges facing a startup trying to compete with already mature players, such as industry heavyweights like CATL, LG Energy, and Tesla.
Move fast and break…yourself? Over-ambitious growth plans—spanning gigafactories, recycling facilities, and R&D—stretched resources thin, prioritizing growth over stabilization and exposing foundational flaws. The various operational and quality problems stemmed from Northvolt’s need to move fast. The mindset of “move fast and break things” might work in software, but this presents a challenging case study for hard-tech startups following that model.

What's next

With plenty of blame to go around, many investors and policy makers will be studying exactly what went wrong. With Europe already seen as struggling to compete with both the US and China in building and scaling climate tech start ups, Northvolt may become the poster child of that narrative.

Restructuring for survival. If Northvolt is to survive – and that might be a big if at this point – it must prioritize its debt restructuring to manage cash flow and avoid insolvency. The CEO’s departure opens the door for Northvolt to reorganize its management team and bring in experienced personnel to turn the company around. The chapter 11 process will allow Northvolt to access $145m in cash collateral and $100m in debtor-in-possession financing (loaned by truck maker Scancia), providing some much needed immediate relief. Stabilizing the Skellefteå factory takes priority, but planned expansion projects in Germany, Canada, and recycling facilities will reportedly proceed as expected due to extensive government subsidies. For all of these projects, safety and operational improvements are vital for Northvolt to keep the doors open long term.
A challenging road for European carmakers. German cars are marketed for their high quality engineering; quiet, smooth, and reliable. Except, with fewer moving parts, now most cheap EVs are too. With the growing decline of ICE vehicles some of the engineering benefits Germany offers have fallen away a bit, leaving automakers searching for new areas to compete. Lacking a reliable domestic supply chain may make competing with high tech Chinese cars even tougher long term.
Europe scrambling for climate innovation. The European climate tech market has long lamented its position as secondary to the US. This is represented by early-stage investor appetite, with around twice as much venture capital flowing into American climate-tech startups than European ones since 2020, and a high-profile bankruptcy in Europe will likely reinforce this trend. In some industries, like batteries, Europe is also losing out to Chinese competitors. The EU technology transfer proposal is one attempt to address this, and if it goes through will represent a shift in strategy for attempting to onshore climate innovation in Europe.

Deals of the Week (11/18-11/24)

Late-Stage / Growth

⚡ Tokamak Energy, an Abingdon, UK-based tokamak fusion energy developer, raised $125m in Growth funding from East X Ventures, Lingotto, BW Group, Furukawa Electric Company, and other investors.

⚡ Liquid Wind, a Göteborg, Sweden-based e-Fuels developer, raised $46m in Series C funding from Uniper, HYCAP, and Samsung Ventures.

🔋 Iontra, a Denver, CO-based battery performance and safety platform, raised $45m in Series C funding from Volta Energy Technologies.

🌾 EarthOptics, an Arlington, Virginia-based soil sensing service provider, raised $24m in funding from Conti Ventures, The Production Board, CNH Industrial, Cibus Fund, Cooperative Ventures, and other investors.

⚡ Sympower, an Amsterdam, Netherlands-based demand response platform, raised $23m in Series B funding from A&G Energy Transition Tech Fund, Activate Capital Partners, Expon Capital, PDENH, and Rubio Impact Ventures.

🌾 Oishii, a Kearny, NJ-based strawberry vertical farm developer, raised $16m in additional Series B funding from Miyako Capital and Resilience Reserve.

🚢 Candela, a Lidingö, Sweden-based electric hydrofoil boats manufacturer, raised $14m in additional Series C funding from SEB Private Equity, EQT Ventures, and Kan Dela AB.

⚡ GridBeyond, a Dublin, Ireland-based DERMs platform, raised $12m in funding from Triodos Energy Transition Europe Fund.

💧 Epic Cleantec, a San Francisco, CA-based water reuse for buildings technology developer, raised $12m in Series B funding from Dr Kathy Fields and Dr Garry Rayant Family Office.

♻️ Ecore, a Lancaster, PA-based reclaimed rubber materials to products developer, raised an undisclosed amount in funding from General Atlantic BeyondNetZero.

☔ Technosylva, a San Diego, CA-based wildfire risk monitoring platform, raised an undisclosed amount in Growth funding from General Atlantic BeyondNetZero and TA Associates.

Early-Stage

📦 Faircraft, a San Francisco, CA-based lab-grown leather developer, raised $16m in Series A funding from Alliance for Impact, BPI, CapHorn, Entrepreneur First, Heirloom Carbon, and other investors.

🏭 DEScycle, a London, UK-based metals recycling service provider, raised $13m in Series A funding from BGF, Vorwerk Ventures, CPI Enterprises, Cisco Investments, Green Angel Ventures,and other investors.

💧 OceanWell, a Los Angeles, CA-based desalination and water technology developer, raised $11m in Series A funding from Kubota.

⚡ Flipturn, a New York City, NY-based EV fleet charging and management platform, raised $11m in Series A funding from CRV.

Other

🏠 Lancium Technologies, a Houston, TX-based power orchestration and management solutions platform, raised $500m in PE funding from Blackstone.

☀️ Silfab Solar, a Mississauga, Canada-based photovoltaic module developer and manufacturer, raised $100m in Project finance funding and Debt funding from ARC Financial and Breakwall Capital.

⚡ Ample, a San Francisco, CA-based battery swapping service provider, raised $25m in Corporate funding from Mitsubishi Corporation.

Exits

☔ Gro Intelligence, a Queens, NY-based agriculture and climate analytics software, was acquired by Almanac for an undisclosed amount.

🔋 Field, a London, UK-based battery energy storage system developer, acquired a BESS project from Clearstone Energy for an undisclosed amount.

New Funds

Neos Partners, a San Diego,CA-based investment firm, held a final close of its $1.4bn fund that will focus on renewable energy, grid, and data center investments.

Generate Capital, a San Francisco, CA-based investment firm, raised a $1bn revolving credit facility that will support investments across sustainable infrastructure.

Extantia Capital, a Berlin, Germany-based investment firm, held a final close for its $215m fund that will invest in early-stage climate software and hardware solutions.

Blue Bear Capital, a Paris, France based investment firm, raised $160m for its third fund that will invest in early-stage climate tech companies.

Nucleus Capital, a Berlin, Germany-based investment firm, launched a $42m fund to invest in Pre-seed and Seed-stage companies working on synthetic biology solutions for sectors like alternative foods and industry.

Move Energy, an Amsterdam, Netherland-based investment firm, raised $37m from EIF to invest in hardware and software companies working on decarbonization efforts at the Series A stage .

Can’t get enough deals? See full listings and deal analytics on Sightline Climate

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In the News

At COP29, a coalition of countries pledged to end new unabated coal plants, though the commitment notably excluded major emitters such as China, India, and the US. Indonesian President Prabowo went further, committing to retire all coal plants within 15 years. Other major announcements included the controversial $300bn financing agreement for developing nations. Though a $200bn increase on the last commitment, it was blasted by many, such as India, as not going far enough. For a detailed analysis of the key outcomes, check out Carbon Brief’s write up.

Trump nominated Chris Wright as Secretary of Energy. Wright is CEO of Liberty Energy, an oilfield services company known for its fracking expertise, but is also a board member at advanced nuclear company Oklo and an investor in Fervo Energy, a leader in next-gen geothermal, suggesting an all-of-the-above energy disposition. Doug Burgum, Governor of North Dakota, has been nominated for Secretary of the Interior, where he’s expected to emphasize federal land use for energy production, particularly oil, gas, and emerging geothermal projects.

Massachusetts has passed sweeping permitting reforms aimed at accelerating clean energy development, including geothermal projects and long-duration energy storage (LDES). The bill reduces permitting timelines by half and limits natural gas infrastructure expansion, reflecting a state-level pivot toward clean energy leadership. This comes as the federal HEAT Act, which seeks to streamline geothermal permitting by waiving certain drilling and environmental review requirements, advanced in the House.

The Department of Energy announced two new hydrogen hubs under its H2Hubs initiative, part of a broader $8bn program aimed at jumpstarting clean hydrogen production. These hubs reflect a regional strategy to build localized hydrogen economies, with one focused on heavy industry and the other targeting transportation sectors. While the promise of hydrogen grows, concerns remain over cost competitiveness and infrastructure challenges that could hinder widespread adoption.

Vulcan Energy Resources has begun producing lithium hydroxide from geothermal brine at its German facility, marking a first for Europe. This process combines geothermal power generation with critical mineral extraction, creating a low-carbon supply chain for EV batteries. As well as supporting lithium sourcing, the high value of the lithium provides a useful alternative revenue stream for emerging geothermal companies.

EnerVenue has backed out of plans to build a manufacturing facility in Kentucky, citing challenges in scaling its production. This withdrawal opened the door for Canadian Solar, which announced it would repurpose the site for battery energy storage systems (BESS) and cell manufacturing.

ExxonMobil advances push into Lithium with MOU for 100,000 ton offtake. Though non-binding, the agreement with LG Chem shows the potential for traditional energy companies to expand into climate tech supply chain, especially where there are strong overlaps in expertise and assets, such as with direct lithium extraction.

Pop-up

CarbiCrete’s shakes construction world to its foundations with cement-free concrete.

Ritchie looks at how much power AI needs to take over the world.

The DOE’s OCED summarises the lessons so far for first-of-a-kind project development.

Eyes peeled for a new Silicon valley video tool with excellent compression, as the Minnesota Department of Natural Resources set up an “EagleCam”.

Texas lays out a plan to lead the world in advanced nuclear.

Tesla gets a bump as Trump suggests deregulating autonomous vehicles.

Making waves in LA, Eco Wave Power gets approval for new wave energy converter.

Opportunities & Events

💡 MIT Climate & Energy Prize: Apply to the MIT Climate and Energy Prize by December 2nd for a chance to compete with other undergraduates from around the world and win up to $100,000 in grand prizes, along with access to valuable resources.

📅 Transition-AI 2024: Register to attend Transition-AI, hosted by Latitude Media, on December 3rd to learn about use cases and market opportunities for AI in the power sector, and take advantage of networking opportunities through a mix of keynotes, panels, and workshops.

📅 Energy Bar: RSVP to attend Greentown Labs' signature EnergyBar event, co-hosted by Siemens, on December 5th and join others in reflecting on the progress we’ve made over the past year as we take continued action toward a decarbonized future in 2025.

💡Founder Fellowship: Apply to the Newlab Founder Fellowship by December 6th for an opportunity to join a cohort of 15 climate tech founders from underrepresented communities, gain access to valuable targeted mentorship, and a year-long membership to Newlab.

📅 Climate Tech Demo Night: RSVP to attend the Climate Tech Demo Night, co-hosted by Streetlife Ventures, AWS, and others, on December 9th to explore the latest climate tech innovations in New York.

📅 MCJ Job Predictions: RSVP to join MCJ and Climate People on December 11th for a webinar on Job Market Predictions for 2025, covering topics such as the most in-demand skills and how the climate career landscape is expected to evolve.

📅 EDFR Behind-the-Meter RFP – “Project Arete” EDF renewables will be opening an RFP on December 18th. Selected projects will benefit from below market energy pricing and other benefits.

💡Greentown Labs ACCEL Program: Apply to the Advancing Climate Tech and Clean Energy Leaders (ACCEL) program by January 7th for a chance to secure up to $25,000 in non-dilutive funding, mentorship, and lab resources to support the growth of your BIPOC-led startup.