US Battery Firm Acquires Northvolt, Boosting Heide's Hopes for Electric Car Battery Manufacturing
In a significant development for the European battery industry, US company Lyten is set to acquire the remaining sites of insolvent Swedish battery maker Northvolt. The transaction, valued at approximately $5 billion, includes Northvolt's parent factory, expansion plant in Skellefteå, development center Northvolt Labs in Västerås, planned factory Northvolt Three in Heide, and all intellectual property.
The financial terms of the acquisition have not been disclosed, but it will be fully funded by equity investment from private investors in Lyten. There is no indication that German taxpayers' money is directly involved in this deal.
The factory in Heide, Schleswig-Holstein, is part of this private equity-funded purchase. Operations at the Heide site are expected to resume after the transaction is completed.
Northvolt, once a major hope for the European automotive industry as a manufacturer of batteries for electric vehicles, faced setbacks including BMW withdrawing a billion-dollar order for battery cells and growing debts, leading to insolvency. In mid-March, Northvolt filed for insolvency for its Swedish operations.
Despite these challenges, the German federal government and the state of Schleswig-Holstein have been working with Lyten and Northvolt to maintain the program for the battery production plant in Heide. The federal government and the state each guaranteed half of the 600 million euros that Northvolt received from the state-backed KfW bank for the planned factory near Heide through a convertible bond. However, this EU funding has not yet been paid out.
The Heide factory will aim to build a battery production plant with an initial capacity of 15 gigawatt hours. The acquisition is subject to regulatory approval in Sweden, Germany, and the EU and is expected to be completed in the fourth quarter of 2025.
The acquisition of Northvolt's assets comes amidst criticism from some quarters. Katherina Reiche, Habeck's successor, criticized the state funding for Northvolt as "flawed" during a government questioning in the Bundestag. However, the deal does not appear to involve any use of German taxpayer money.
According to Daniel Günther, Minister President of Schleswig-Holstein, the preliminary agreement is a positive development. The acquisition will see Northvolt's remaining German and Swedish assets’ operations restart under Lyten management with the rehiring of former staff.
The exact financial conditions and taxpayer risk in Germany have not been publicly disclosed as of August 2025. The EU Commission approved direct funding of around 700 million euros for Northvolt, with 137 million euros from the state and 564 million from the federal government. However, this funding has not yet been paid out.
[1] BBC News [2] Reuters [3] Financial Times [4] Deutsche Welle [5] Bloomberg
- The acquisition of Northvolt's assets by US company Lyten, valued at approximately $5 billion, marks a significant growth in the European battery industry, especially in the realm of electric vehicle batteries.
- The fact that the Heide factory, which is set to resume operations after the transaction, will be entirely funded by private equity investment from Lyten highlights the business implications of the deal.
- Amidst political discussions and criticism regarding the state funding of Northvolt, the deal's financial terms suggest no direct involvement of German taxpayers' money, as reported by various news outlets such as the Financial Times, Reuters, and Deutsche Welle.
