A confidential report from the German Federal Audit Office has revealed that the Federal Ministry for Economic Affairs and Climate Action was informed of Northvolt’s production difficulties as early as November 2023, significantly earlier than previously acknowledged. The findings, which will be presented to the Bundestag’s Budget Committee this Wednesday, detail how the now-insolvent Swedish battery cell manufacturer requested a six-month deferral of its initial loan repayment in November 2023.
According to the report, Northvolt cited “delays in the production ramp-up” as the reason for the request, predicting a reduction in battery cell deliveries in the coming years. The Interministerial Committee, under the leadership of the Ministry of Economic Affairs, subsequently approved the postponement.
This revelation indicates that the Ministry, previously headed by Green Party politician Robert Habeck, was aware of problems at Northvolt at least six months before it publicly admitted to knowledge of production issues which ultimately led to the company’s insolvency. The Ministry had previously stated that these issues were only known “from the summer of 2024.
The report raises questions regarding whether the Ministry was aware of Northvolt’s precarious situation even before the Federal Government guaranteed a €600 million loan in October 2023. Habeck had previously asserted that the problems were brought to their attention “after the contracts were signed” but auditors found that “indications of delays and cost increases” were already discernible for the Ministry at the decision-making stage.
In spring 2023, the Ministry had already allowed Northvolt to postpone the repayment of the initial tranche on a 2020 loan. At the time, economic auditors were asked to assess a potential further loan for Northvolt, “especially in light of cost increases and construction delays.
Habeck and the Ministry have not yet responded to the allegations. The Budget Committee extended an invitation to Habeck for a hearing scheduled for Wednesday, but he declined, citing professional commitments and his absence from Berlin.
Northvolt had been considered a vital component of Germany’s green transition, intended to supply European battery cells to the German automotive industry. The company, which had ambitious plans for a gigafactory in Heide, Schleswig-Holstein, benefited from guarantees totaling billions of euros from the Federal Government, Schleswig-Holstein and the European Investment Bank. The collapse of this ambitious venture may cost German taxpayers more than €1 billion.
