SHANGHAI: Silicon Valley startup Lyten will need to convince carmakers it can succeed where bankrupt Swedish electric vehicle (EV) battery maker Northvolt failed, creating a European champion to reduce the region’s reliance on China.
Lyten, which develops lithium-sulfur batteries, unexpectedly announced on Aug 7 it was buying Northvolt’s assets, offering a lifeline to future European battery production for EVs.
But customers and investors burned by the Northvolt experience remain wary of committing without seeing a proven product that can be delivered at scale, interviews with over a dozen battery industry experts, analysts and car company sources revealed.
As well as taking on Northvolt’s production of lithium-ion batteries, Lyten plans to develop its own lithium-sulfur batteries for EVs, but will need substantial funds and lacks the Swedish company’s erstwhile US$50bil order book.
Lithium-sulfur cells are one of several next-gen battery chemistries, promising a lighter, lower-cost alternative and lower dependence on critical minerals from China, but are still in their infancy.
Lyten currently produces lithium-sulfur cells at a pilot plant in Silicon Valley.
Jeep-owner Stellantis has, with a 2% stake, been in partnership with Lyten since 2023 to explore applications of Lyten’s lithium-sulfur technology, including for battery cells, lightweight composites and on-board sensors.
A Stellantis spokesperson said any supply deals would depend on technical validation, industrial scale-up, local production capacity and commercial terms.
Northvolt, despite attracting backers, including Goldman Sachs, collapsed with US$8bil in debt in March after losing orders and key investor support, and missing production targets.
Carmakers scaling down their electrification plans have also hit EV battery demand.
Northvolt’s flagship factory in Skelleftea, Sweden, however, was starting to turn around in the weeks before closure, ramping up production to 30,000 lithium-ion cells a week.
Lyten chief executive officer Dan Cook said he hopes Northvolt’s previous customers, which included Volkswagen brands, will return if the company proves itself by delivering consistently to a single, undetermined, customer at low volumes with good quality.
Former Northvolt-backer Scania said it was too early to discuss ordering cells from Lyten. Volvo Cars, which had partnered with Northvolt via its nascent battery unit Novo Energy before cutting ties, declined to comment.
“Lyten is not a name anyone would have associated with lithium-ion manufacturing until 24 hours ago,” said James Frith, at battery-tech focused venture capital Volta Energy Technologies, shortly after the deal was announced.
A person familiar with Stellantis-backed battery maker ACC, another contender to be a European battery champion, said ACC is in talks with three former Northvolt clients, but no new contracts are expected before mid-2026.
Lyten has not said how much it paid for Northvolt’s assets, only that it bought them at a “substantial discount”, fully funded through equity investment from private investors.
Cook said that Lyten had a strong investor base, including money managers and high-net-worth individuals that which had expanded following the Northvolt transaction.
“This allows us to create syndicates of investors, and from that base we will continue to receive large investments,” Cook said.
The company plans further large capital raises and aims to tap European grant programmes such as the European Union’s battery booster package.
BMW, which cancelled a €2bil (US$2.32bil) order with Northvolt last year after quality problems, said it was keen to see the establishment of a European manufacturer of high-quality sustainable cells, but added battery cell supply deals need a “long lead time”.
“In this respect, Northvolt’s successor would only be considered for a future battery cell project, that is still a long way off, and we cannot comment on it at this stage,” a BMW spokesperson said.
A battery scientist at another European carmaker, who declined to be named, said the firm backed away from working with Lyten six months ago because it was only producing at research and development (R&D) scale.
Still, the Northvolt deal could help reopen doors for additional talks with carmakers, the person added.
Acquiring Northvolt’s production and R&D facilities would enable Lyten to reach large-scale lithium-sulfur EV battery cell production by 2028, rather than its end-of-the-decade forecast, Cook said. — Reuters
