The potential financial risk to German taxpayers stemming from the current crisis at battery manufacturer Northvolt may be significantly higher than previously estimated, according to a report in the “Handelsblatt” newspaper.
The Swedish company is currently undergoing restructuring. It is already publicly known that the German federal government and the state of Schleswig-Holstein may not recoup €600 million in aid provided in the form of a convertible note for a planned factory in Heide, northern Germany.
Further analysis reveals additional potential losses. In 2020, the previous German government-a coalition of CDU/CSU and SPD-assumed a guarantee for 80 percent of bank loans to Northvolt, totaling $525 million. A substantial portion of this guarantee remained outstanding when Northvolt initiated its restructuring proceedings. According to a briefing given by a representative from the Federal Ministry for Economic Affairs on December 4, 2024, to the German Parliament’s Economic Committee, the federal government’s current risk exposure amounts to $376 million, plus financing costs.
Details are drawn from the minutes of the hearing – marked “for official use only” – obtained by the “Handelsblatt”. The document indicates that, in addition to the €600 million, approximately another €300 million could potentially be lost to German taxpayers. Former Federal Minister for Economic Affairs Robert Habeck (Green Party) was questioned during the hearing. According to the minutes, Habeck confirmed at the time that the damage at Northvolt could be around €300 million higher, stating that “this money could be lost” in the worst-case scenario.
It is currently unclear whether the situation has changed since the hearing. A spokesperson for the Federal Ministry for Economic Affairs responded to the newspaper’s inquiry by stating that they are unable to provide any information about specific risk positions at this time. Northvolt itself did not comment on the matter. However, there is now hope that construction of the factory in Heide may be able to resume, as U.S.-based battery manufacturer Lyten is reportedly seeking to acquire Northvolt, including the construction site in Heide.