KUALA LUMPUR, Nov 19 (Bernama) -- Bursa Malaysia gave up earlier gains to end mixed today, amid a higher regional market showing, as property, construction, and healthcare counters attracted buying interests, while plantation, banking, and telecommunication stocks saw some profit-taking, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.70 points to close at 1,602.34 from yesterday’s close of 1,604.04. The benchmark index, which opened 0.86 of-a-point lower at 1,603.18, moved between 1,601.02 and 1,608.88 during the trading session. However, the broader market was mixed to higher, with gainers leading decliners by 565 to 438 while 502 counters remained unchanged, 961 untraded, and 14 suspended. Turnover narrowed to 2.83 billion units valued at RM2.08 billion versus 2.96 billion units valued at RM2.23 billion yesterday. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the benchmark index remained range-bound and it required a dec
Key Takeaway: Northvolt, Europe’s leading EV battery manufacturer, is grappling with production issues, missed targets, and financial strains, underscoring the difficulties of scaling up in the competitive battery market.
Production Challenges
Missed Targets:
- Northvolt has been consistently missing weekly production goals for shippable battery cells since September.
- Internal documents show a target of 51,000 cells per week by the end of 2024, but recent output was around 26,000 cells for the week ending Nov. 10.
- The original "Path to 100k" roadmap aiming for 100,000 cells per week this year has now been classified as "informal" and is not expected to be met.
Operational Issues:
- Production at one of two manufacturing buildings in Skellefteå was suspended in late October and is expected to remain halted until December.
- To cut costs, Northvolt has ended 24/7 production cycles, now operating only on weekdays.
Key Obstacles:
- Faulty machinery, inexperienced staff, and overly ambitious targets.
- Quality checks and additional production steps reduce the number of cells deemed deliverable.
Financial Strains
- Job Cuts: Northvolt reduced its global workforce by 20% in September and scaled back operations.
- BMW Contract Loss: A €2 billion contract with BMW was canceled in June due to delays and quality concerns.
- Bankruptcy Discussions: Sources indicate the company has considered Chapter 11 bankruptcy protection in the US, though Northvolt declined to comment.
Strategic Adjustments
Refocusing Production:
- Now prioritizing delivery to key clients such as Scania, Audi, and Porsche, with Volkswagen as its largest shareholder.
- Scania reported sufficient cell deliveries under a revised agreement this year after previous delays hampered its electric truck shipments.
Improving Processes:
- Reduced production shifts allow for better repair and maintenance, potentially improving cell quality.
Market Context
Industry Leader with Challenges:
- Despite setbacks, Northvolt remains ahead of other European battery makers.
- Scaling up battery cell production is inherently challenging due to the precision and complexity required at high volumes.
EV Battery Market:
- Northvolt is critical to Europe’s goal of reducing dependence on Chinese battery makers.
Expert Opinions
- Hans Eric Melin (Circular Energy Storage): Slowing production could help address quality issues by allowing more time for repair and maintenance.
- Scania CEO Christian Levin: A revised delivery plan with Northvolt has stabilized supply, highlighting the importance of realistic production scaling.
Conclusion
Northvolt’s struggles highlight the steep learning curve in scaling EV battery production, especially in a capital-intensive and technologically demanding industry. While the company remains a critical player in Europe’s green tech ambitions, operational and financial stability will depend on realistic production targets, sustained quality improvements, and effective cost management.
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