Norwegian aluminum giant Norsk Hydro has completed the full acquisition of Hydrovolt, a specialist in end-of-life battery recycling. The transaction, worth 78 million Norwegian kroner ($6.79 million USD), follows the purchase of shares in the financially troubled Swedish company Northvolt.
Northvolt's well-documented struggles
Northvolt, once hailed as Europe's best chance for local production of electric batteries, is going through a critical period, marked by production problems, the loss of a major contract and a financing crisis.
In November, Northvolt filed for Chapter 11 bankruptcy protection in the U.S. At the same time, it stopped financing most of its joint ventures and non-core activities.
Since the second half of 2024, Norsk Hydro had increased its stake in Hydrovolt, while financing its operations. The Norwegian company now owns 100 percent of Hydrovolt.
A refocusing strategy for Norsk Hydro
In November, Norsk Hydro announced its intention to reduce its investment in batteries. However, its investment in Hydrovolt seems to run counter to that strategy.
A Norsk Hydro spokesperson explained that “We see Hydrovolt as a special case, because battery recycling is closer to our other aluminum activities. This creates synergies, particularly with our customers in the automotive industry.”
Despite the acquisition, Norsk Hydro doesn’t plan on remaining the sole owner of Hydrovolt. The company wants to find a new partner to further develop battery recycling.
Continued commercial collaboration with Northvolt
Although Northvolt has sold its stake in Hydrovolt, the Swedish company remains a key customer. It will continue to purchase the raw material known as black mass, produced by battery recycling.
Northvolt is refocusing on the production of battery cells, abandoning its other activities, including its in-house recycling unit, Revolt. Norsk Hydro confirmed it is not interested in acquiring Revolt.
An uncertain future for Northvolt
Northvolt, which was due to provide a report on its search for financing to a U.S. judge on January 28, remains in a precarious situation. With only $30 million USD in cash on hand at the time it was placed under protection, the company acknowledged those funds would only be sufficient for one week's operations.
Its initial loan of $100 million USD, granted by truck manufacturer Scania, is due to expire soon, reinforcing the urgency of finding new investors.
A bet on recycling for Norsk Hydro
With this acquisition, Norsk Hydro is betting on battery recycling, a fast-growing field in tune with today's environmental challenges. Meanwhile, Northvolt is fighting for its survival, illustrating the turbulence in the European battery sector.