(Bloomberg) -- Cash-strapped battery maker Northvolt AB is working on a plan to raise more than 10 billion kronor ($920 million) to continue its operations beyond the immediate horizon, according to its chief executive officer.
“In the long term we need to secure a capitalization of somewhat north of 10 billion kronor in the coming year,” CEO Peter Carlsson told reporters after a seminar in Stockholm on Wednesday. “We are talking to existing owners as well as potential new investors.”
He wouldn’t discuss the timing or size of a separate, smaller rescue package Northvolt is working on to tide the electric-vehicle supplier over its liquidity hurdles.
Bloomberg News has previously reported that Northvolt is closing in on about $300 million in funding that includes debt and equity, citing people familiar with the matter. Northvolt spends about $100 million a month on operational costs, according to local media.
The company is working to improve customer deliveries and implement a strategic plan that involves cutting costs and either divesting or bringing in partners in parts of the business, Carlsson said.
Northvolt has received about $10 billion in debt and equity funding since its founding in 2017. But it’s up against established Chinese competitors like Contemporary Amperex Technology Co. and BYD Co. that have had years to master the challenge of making battery cells and have much lower costs.
Asked whether any of the new investors could be Chinese, Carlsson didn’t rule out the possibility. “We are now looking at potential partnerships, including in Asia,” he said. “But those discussions are in an early phase.”
Strategic relationships have the potential to help Northvolt develop its battery-making expertise, Carlsson said.
“It’s interesting to exchange experiences around scaling up operationally and potentially finding benefits of scale that can bring us more rapidly to the volume advantage the industry requires,” Carlsson said.
The company has struggled to ramp up cell production at its main plant near the Arctic Circle in Sweden, and costs from its expansion have been piling up. In response, Northvolt has scaled back major projects and narrowed its focus to increasing output.
Separately, automaker Volvo Car AB last week began the process of taking over a joint venture with Northvolt and said any future battery production at the Gothenburg site on Sweden’s west coast would be dependent on “third party or other partner involvement.”
The crisis at Northvolt is already hurting the area around its battery factory in Skelleftea, where an expansion project was driven into bankruptcy last month — cascading into several large bankruptcies among its suppliers.
(Adds context on economic impact. An earlier version of the story corrected a misspelling of the company’s name.)
©2024 Bloomberg L.P.