Internal documents have revealed the German Federal Ministry for Economic Affairs and Climate Action was informed of significant challenges at Swedish battery cell manufacturer Northvolt earlier than previously acknowledged. A confidential report by the Federal Audit Office, scheduled for presentation to the Bundestag’s Budget Committee this Wednesday, indicates that Northvolt alerted the ministry as far back as November 2023 regarding production difficulties.
The report reveals Northvolt requested a six-month postponement of the initial repayment tranche of a loan guaranteed by the German government since 2020. The company cited delays in scaling up production, predicting a decrease in battery cell deliveries in the coming years. The Interministerial Committee, led by the Ministry for Economic Affairs, approved the postponement.
This timeline suggests the ministry was aware of Northvolt’s problems at least half a year before publicly acknowledging them. Until recently, the ministry stated that production issues leading to Northvolt’s insolvency only became apparent “from the summer of 2024.
It remains unclear whether the ministry was aware of the precarious situation before endorsing a €600 million government guarantee for Northvolt in October 2023. While former Minister Robert Habeck stated that issues were only revealed after contracts were signed, auditors noted that “indications of delays and cost increases” were already apparent to the ministry at the time of the decision.
The ministry had previously allowed Northvolt to postpone the first tranche of the 2020 loan in the spring of 2023. At that time, economic auditors were also tasked with assessing a potential additional loan, particularly given rising costs and construction delays. Habeck and the ministry have not commented on the allegations. The Budget Committee invited Habeck to Wednesday’s session, but he declined, citing professional commitments and stating he would not be in Berlin.
Northvolt was considered a pivotal element in Germany’s transition to electric mobility, intended to supply European-made batteries for the automotive industry. The company received billions of euros in guarantees from the German federal government, Schleswig-Holstein and the European Investment Bank. Northvolt’s collapse, including its planned gigafactory in Heide, Schleswig-Holstein, could potentially cost German taxpayers over one billion euros.