Volkswagen has recently announced a substantial write-down of its 21% stake in the Swedish battery cell manufacturer, Northvolt. This decision comes following Northvolt’s filing for bankruptcy protection in the US, as reported by Reuters. The challenges faced by Northvolt, such as missed production targets and slower-than-expected growth in electric vehicle demand in Europe, have led to this write-down.
The write-down at Volkswagen will impact its financial year, although the exact current value of the stake remains undisclosed. At the end of 2023, Volkswagen reported the book value of its shareholding in Northvolt at €693 million, a significant decrease from the previous year. This value has further decreased in 2024.
Despite the write-down, Volkswagen expects an operating profit margin of 5.6% and a net cash flow of €2 billion in its automobile division for 2024. The company has not provided any comments on the write-down and has remained silent on the potential impact of Northvolt’s filing on its operations.
In a related development, the Financial Times reported that funds managed by Goldman Sachs, Northvolt’s second-largest shareholder with a 19.2% stake, plan to write off their $900 million stake by the end of the year. Swedish pension fund AMF, another top ten shareholder of Northvolt, confirmed regular reviews and adjustments of its unlisted holdings’ values without specifying details about its Northvolt stake.
Following Northvolt’s bankruptcy filing, CEO Peter Carlsson has announced his resignation. However, he will continue as a senior advisor and remain on the board. The company expects its restructuring process to conclude by the first quarter of 2025, during which it will consider new investment proposals from strategic and financial investors, existing lenders, shareholders, and customers.
As Northvolt navigates through its restructuring phase, stakeholders are closely monitoring the situation for any further developments. The automotive industry continues to witness shifts and challenges, emphasizing the importance of adaptability and strategic decision-making in these evolving times.
