Magnus Henrekson, professor of economics at the Research Institute of Industrial Economics, does not believe in a future for Northvolt's battery factory. Archive photo.
Magnus Henrekson, a professor of economics at the Research Institute of Industrial Economics and an early critic of Northvolt’s large battery industry venture, believes that Skellefteå was the wrong location for the factory from the start, as the municipality was not equipped to handle such a large establishment.
– We saw overheating. There was a lack of housing, and other existing companies were pushed out by losing their employees. The municipality and region made a lot of surrounding investments, hoping for future tax revenues and income from all the people working there – and now they won’t get that, he told TT.
Arne Müller, a journalist and author who has written books about the green transition, does not agree with Henrekson.
– I think Skellefteå is a good location for this type of factory. To produce truly green batteries, you need renewable electricity, and that is available in Skellefteå. It is also an advantage, at least in the long run, that a large portion of the raw materials needed for battery production are found in the surrounding area.
Finding workers might have been easier if the factory had been established in a more populated area, but Müller sees that as a broader failure of society.
In the summer of 2023, the government-appointed investigator Peter Larsson was tasked with examining what state interventions could enable sustainable community development and rapid population growth in Norrbotten and Västerbotten, in light of the major industrial investments. Müller says Peter Larsson was very clear in his report – municipalities cannot manage this on their own without state support.
– The risks that municipalities bear are enormous.
Arne Müller is an author and journalist who has written several books about the green industry and investments in northern Sweden. He does not agree that Skellefteå was the wrong location for a battery factory. Archive photo.
Have Skellefteå and the other municipalities received enough support?
– They didn’t get a thing.
Do you think they will get support?
– Nothing suggests that they will.
People often talk about the Norrlandsfonden. Is there too little money?
– It’s a very small amount compared to the actual needs, says Müller.
After Northvolt filed for bankruptcy on Wednesday, Henrekson is highly doubtful that anyone will want to, or be able to, continue battery production.
– The big Chinese manufacturers don’t even seem interested in setting up operations there, even if they were given the building for free. They don’t think it’s built correctly, and it doesn’t suit them, says Henrekson to TT.
He also finds it unlikely that another company would step in. Anyone taking over would have to start from scratch, he says.
– It’s a long road to learning and mastering these processes. Clearly, Northvolt wasn’t able to do it. It will also be much harder to get credit financing to build or restart a battery factory after this collapse.
Müller is cautious about speculating on whether a new owner might take over the factory. Regardless of the outcome, he believes Skellefteå will feel the impact.
– Unfortunately, whether they succeed or not, the consequences for Skellefteå will be severe. Even if new owners are found and production continues, it will be something entirely different from what was originally planned.
When Northvolt was established, it had major ripple effects on Skellefteå’s economy. Subcontractors and other businesses grew around Northvolt, the population increased, and new construction projects were launched.
A restart wouldn’t have the same ripple effects, says Müller, drawing comparisons to when the Pajala mine restarted after bankruptcy. In that case, only the industrial jobs returned.
– People are simply more cautious. I wish I could say something different, but I believe the effects on Skellefteå will be very significant, he says, adding:
– Which brings me back to whether it’s reasonable for a single municipality to bear all the risk for an investment of this scale.
Henrekson believes that Northvolt’s owners made many mistakes leading up to the bankruptcy.
– The most irresponsible thing, in my opinion, was failing to focus on learning how to produce high-quality batteries on an industrial scale in Skellefteå. Before they had even mastered battery production there, they started building factories in Borlänge, Gothenburg, Germany, Montreal, and even Texas.
There is only one thing he mentions that he thinks Northvolt’s owners did well.
– They were obviously very skilled at creating an image that everything was going great. And it’s surprising how loyal the employees have been, not speaking out about the things that weren’t working.