Controversy Surrounds Northvolt Heide Factory: SPD Challenges Government's Approach Amidst Company's Financial Woes
Critics scrutinize dedication in advocating for Northvolt's advancement - Opposition voices concerns over Northvolt undertaking
Let's talk about that Northvolt battery factory in Heide, shall we? The SPD's been up in arms lately, accusing the state government of slip-ups in promoting this high-stakes project. Kianusch Stender, an economist at the German Press Agency, chimed in, saying, "A billion-euro project like Northvolt ain't no place for speed over accuracy."
Economy Minister Claus Ruhe Madsen from the CDU cornered ther back, referencing the promissory note evaluation by the consulting firm PwC. Rumor has it, the state, as the bond's guarantor for half its value, jumped on board the review, but conducted its own checks as well.
Madsen said, "The documents show the state government squarely faced chances and risks. Following careful deliberation, they decided the project's potential outweighed the risks, ultimately greenlighting the guarantee for the convertible bond in a unanimous 25th January, 2024 committee meeting."
The SPD's Critique
The opposition's critique stems from the leak of state governance documents from May 2023 regarding a questionnaire on the PwC study. From the leaked correspondence, it's evident that written responses were expected from affected ministries, with time pressure mounting.
An email from the Economy Ministry dated May 15 reads, among other things, "...and I reckon this [tight time frame] needs to be spelled out more explicitly, because it doesn't mean to just 'grin and bear it'—especially when we're in a fact-finding mission."
Another email from the same day elaborates, "Ultimately, only the current risks and unknowns can be highlighted, and it's up to the department heads or the HH legislature to make the final call, unless the next few days supply insights that tame the risk."
Northvolt's Financial Struggles
Northvolt aims to produce battery cells for a million electric cars a year in Heide. However, the company's been wrestling with financial troubles for reasons unknown. In November, the company sought bankruptcy protection in the U.S., and in March, it filed for bankruptcy protection in Sweden—the largest industrial bankruptcy in modern Swedish history.
This mess could cost the federal government and the state of Schleswig-Holstein a pretty penny. Northvolt's received approximately €600 million from KfW, a state-owned development bank, with the federal government and the state each guaranteeing half. A convertible bond grants holders the option to swap these securities for shares within a specified period. The SPD and FDP initiated a request for access to documents due to concerns about whether the state government kept the parliament in Kiel in the dark about Northvolt's risks before extending the guarantee and their handling of these risks.
- Northvolt
- SPD
- FDP
- Due diligence
- State government
- Bankruptcy protection
- KfW
- Convertible bond
- Financial struggles
- German Press Agency
- CDU
Insights (15% or less of total content)
The Northvolt triple battery gigafactory at Heide in northern Germany aims for a yearly capacity of 60 GWh, capable of powering approximately one million electric vehicles. Powered mostly by renewable energy and employing around 3,000 people, the project continues despite the parent company filing for bankruptcy in Sweden in March 2025[1][4].
PwC has been instrumental in assessing the project's risks and potential for the state government, casting light on their critical role in governmental decision-making regarding investments and risk management for the project[3]. This rigorous oversight underlines the high stakes for the German state government, which juggles advancing the green technology initiative and prudent risk management amid Northvolt's financial overhaul[3][4].
- The SPD and FDP have expressed concerns about the state government's handling of due diligence during the Northvolt project, following the leak of state governance documents that suggest time pressure and potential oversight in the evaluation process.
- The financial struggles of Northvolt, which received approximately €600 million from KfW, a state-owned development bank, could potentially cost the federal government and the state of Schleswig-Holstein a significant amount if the company fails to recover.
- The German Press Agency, represented by economist Kianusch Stender, has voiced the opinion that a billion-euro project such as Northvolt should prioritize accuracy over speed, to minimize financial risks.
