Battery drain - Northvolt's billions vanish in write-downs

In just over a month, battery manufacturer Northvolt has made huge losses, according to Sveriges Radio Ekot.
– Almost exclusively due to very large write-downs, says Northvolt.

Northvolt Ett, Skellefteå.

Foto: Wilhelm Sandelin Anton

Engelska2025-02-17 11:08

In just over a month, battery manufacturer Northvolt's company has made multi-billion-kronor losses, according to Sveriges Radio Ekot.

The enormous losses in such a short time are, according to Northvolt, almost exclusively due to very large write-downs, i.e. writing down the value of assets and projects, as part of the chapter 11 reorganisation.

For Northvolt AB, the loss before tax was close to three billion kronor, from November 21 to December 31. Things looked even worse for the factory in Skellefteå, Northvolt Ett, which made a loss before tax of over 22 billion.

Norran has seen documents in connection with the chapter 11 process in the US, which show that Northvolt Ett AB made a loss of $2.1 billion (22.5 billion kronor) between November 21 and December 31, 2024.

During the same period, revenue reached $10.8 million – equivalent to 115 million kronor.

Revenue from goods sold amounted to $51 million, equivalent to 546 million kronor.

In a response to Dagens Industri, Northvolt's head of communications Erik Zsiga says:

– It is important to understand that this reporting is not representative of a typical month. As you point out, the 'reorganisation expenses' item is key to understanding these numbers.

– This concerns large depreciations in projects and assets. These are therefore not representative of a normal month.

What is a write-down?

In the context of chapter 11 bankruptcy, a write-down refers to a reduction in the recorded value of an asset. This is a common practice during restructuring as it helps to more accurately reflect the asset's current market value, which might have declined significantly.

Here's why write-downs are important in chapter 11:

Accurate financial picture: Write-downs provide a more realistic view of the company's financial position. This is crucial for creditors and the court to assess the company's viability and the feasibility of its reorganization plan.

Debt restructuring: By reducing the value of assets, the company can often negotiate with creditors to reduce the amount of debt it owes. This can make the debt more manageable and increase the chances of the company successfully emerging from bankruptcy.

Attracting investment: A company with a more accurate and potentially less burdened balance sheet may be more attractive to potential investors. Write-downs can help to clear the way for new financing, which is often essential for a company's recovery.

In Northvolt's case, the massive write-downs likely reflect a decline in the value of their assets, perhaps due to factors such as:

Project delays or cost overruns: Issues with construction or development could lead to a reassessment of the value of certain assets.

Financial difficulties: The company's financial struggles themselves might necessitate write-downs to reflect the increased risk associated with its assets.

It's important to note that write-downs are not just a technical accounting procedure. They have real-world implications, affecting the company's ability to secure financing, negotiate with creditors, and ultimately survive.

Essentially, write-downs in chapter 11 are a way for a company to acknowledge that its assets may not be worth what they were previously valued at. This can be a painful but necessary step towards financial recovery.

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Battery drain - Northvolt's billions vanish in write-downs

In just over a month, battery manufacturer Northvolt has made huge losses, according to Sveriges Radio Ekot.– Almost exclusively due to very large write-downs, says Northvolt.

In just over a month, battery manufacturer Northvolt has made huge losses, according to Sveriges Radio Ekot.
– Almost exclusively due to very large write-downs, says Northvolt.