The potential financial risk to German taxpayers stemming from the ongoing restructuring of battery manufacturer Northvolt may be significantly higher than previously estimated, according to a report in the “Handelsblatt”.
The Swedish company is currently undergoing a restructuring process and it is already publicly known that the German federal and Schleswig-Holstein state governments may not recoup €600 million in aid provided in the form of a convertible bond for a planned factory in Heide, northern Germany.
However, further potential liabilities are now emerging. In 2020, the previous German government – a coalition of CDU/CSU and SPD – assumed a guarantee for 80 percent of bank loans totaling $525 million to Northvolt. A substantial portion of this guarantee remained outstanding when Northvolt initiated its restructuring. According to a presentation delivered by a representative from the Federal Ministry for Economic Affairs on December 4, 2024, to the German Parliament’s Economic Committee, the federal government’s current risk exposure amounts to $376 million plus associated financing costs.
Details are drawn from the minutes of the session, which are marked “for official use only”. The document indicates that, in addition to the €600 million, approximately €300 million may ultimately be lost to German taxpayers. Robert Habeck, then Federal Minister for Economic Affairs, was questioned during the session. According to the minutes, Habeck confirmed that losses at Northvolt could be around €300 million higher than initially projected, stating that “this money could be lost” in the worst-case scenario.
It remains unclear whether the situation has changed since the parliamentary session. A spokesperson for the Federal Ministry for Economic Affairs stated on Tuesday, in response to a query from the newspaper, that they could not provide any information on current risk exposures. Northvolt did not respond to requests for comment. However, there is renewed optimism regarding the future of the Heide factory, as US-based battery manufacturer Lyten is reportedly interested in acquiring Northvolt, including the construction site in Heide.
