Lyten Faces Skepticism Over Revival Plans for Northvolt Assets

Lyten, a Silicon Valley startup, has acquired Northvolt's assets to create a European battery champion. However, carmakers remain wary of committing without seeing a proven product that can be delivered at scale. Lyten plans to develop its own lithium-sulfur batteries, but lacks Northvolt's $50 billion order book. The company currently produces lithium-sulfur cells at a pilot plant in Silicon Valley and has a partnership with Jeep-owner Stellantis. Lyten's success will depend on technical validation, industrial scale-up, and commercial terms.

Silicon Valley startup Lyten has acquired the assets of bankrupt Swedish EV battery maker Northvolt, aiming to establish a European battery champion. The acquisition, announced on August 7, 2023, offers a lifeline to future European battery production for electric vehicles (EVs). However, carmakers and investors remain cautious, seeking proof of Lyten's ability to deliver a scalable, proven product.

Lyten, which develops lithium-sulfur batteries, has taken on Northvolt's production of lithium-ion batteries and plans to develop its own lithium-sulfur batteries for EVs. The company currently produces lithium-sulfur cells at a pilot plant in Silicon Valley. Lyten's partnership with Jeep-owner Stellantis since 2023 involves exploring applications of lithium-sulfur technology, including for battery cells, lightweight composites, and on-board sensors [1].

Northvolt's collapse in March 2023, with $8 billion in debt, was due to losing orders and key investor support, as well as missing production targets. Despite these setbacks, Northvolt's flagship factory in Skelleftea, Sweden, was starting to turn around in the weeks before closure, ramping up production to 30,000 lithium-ion cells a week [1].

Lyten CEO Dan Cook hopes that Northvolt's previous customers, including Volkswagen brands, will return if Lyten proves itself by delivering consistently to a single, undetermined customer at low volumes with good quality. However, both Scania and Volvo Cars have expressed caution about placing orders with Lyten [1].

Lyten's success will depend on technical validation, industrial scale-up, and commercial terms. The company aims to reach large-scale lithium-sulfur EV battery cell production by 2028, rather than its previous end-of-the-decade forecast. However, experts caution that lithium-sulfur is unlikely to be viable for cars before 2030 [1].

Lyten faces stiff competition from other battery startups and established players. German company Theion, Australian-based Gelion, and U.S.-based Zeta Energy are among the contenders in the race to develop cells for EVs. Chinese battery giants like CATL currently dominate the global battery market but are focused more on 'semi-solid' to 'solid-state' batteries, which are further developed than lithium-sulfur cells [1].

Lyten has not disclosed the price it paid for Northvolt's assets, only that it bought them at a "substantial discount," fully funded through equity investment from private investors. The company plans further large capital raises and aims to tap European grant programs such as the European Union's battery booster package [1].

BMW, which cancelled a €2 billion ($2.32 billion) order with Northvolt last year after quality problems, said it was keen to see the establishment of a European manufacturer of high-quality sustainable cells but added battery cell supply deals need a "long lead time" [1].

In conclusion, Lyten's acquisition of Northvolt's assets presents a significant opportunity for Europe to reduce its reliance on Chinese battery suppliers. However, the company must overcome skepticism, funding challenges, and stiff competition to prove its viability in the EV battery market.

References:
[1] https://economictimes.indiatimes.com/tech/startups/battery-startup-lyten-yet-to-convince-carmakers-over-northvolt-revival/articleshow/123494876.cms