(Bloomberg) -- Northvolt AB needs to focus on improving its operations as well as restructuring its finances, Interim Chairman Tom Johnstone said.
The Swedish maker of electric vehicle batteries filed for protection on Thursday under the US Chapter 11 bankruptcy code after failing to make enough battery cells at a sufficiently good quality depleted its cash. Chief Executive Officer Peter Carlsson is also stepping down.
“The biggest issue, to be quite clear, is we’ve not got the operations moving in the right direction,” Johnstone said in an interview with Bloomberg News. “If you look at what we plan to produce this year and where we are, there’s a big gap.”
In parallel to stabilizing its finances, the company will work on “improving the output step by step and meet our customers’ commitments each week,” he said by phone on Friday.
Prior to its Chapter 11 filing, the company had been beset by a string of operational setbacks in the past 12 months including slow deliveries for truck maker Scania CV AB and losing a €2 billion ($2.1 billion) order from BMW AG. But it found itself in a fast-moving liquidity crisis in the autumn, after it failed to scale production at its main factory, and easing growth for electric-vehicle demand led customers to recalibrate the need for batteries.
The ramp-up has two elements, according to Johnstone: the company’s own ability and customers’ ramp up of their products, both happening over a two-to-three year horizon.
Northvolt plans to add more production lines, but also meeting customer demand when they start production of certain vehicles, he said.
Johnstone also said that the company was engaged in discussions with potential partners, but stressed “that’s only one avenue we’re looking at.”
The interim chair would not specify which companies were part of those talks but outgoing CEO Carlsson said earlier this month that potential tie-ups in Asia were part of the scope of the discussions.
The interim chair conceded that Chinese manufacturers such as Contemporary Amperex Technology Co. have a “very different” profile when it comes to volumes and experience of producing cells. But technology is an important differentiator and here Northvolt can compete, according to Johnstone.
“We will never be the cheapest supplier, but we can be the value-based supplier,” he said. “And that’s what we’re focusing on.”
(Updates with further quotes from interim chairman)
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