Crisis-hit EV battery champion Northvolt struggles to meet production targets.

Northvolt has fallen short of some internal production goals and has reduced operations at its battery cell facility in northern Sweden, according to internal documents and sources within the company. This highlights the difficulties in increasing output. Two undisclosed documents reviewed by Reuters, dated 'Production Plan 2024', reveal that since early September, Northvolt has frequently missed its weekly targets for deliverable cells, which are cells ready for customer delivery. These documents contain data up to the week ending November 10. They indicate a goal to produce 51,000 deliverable cells in a week by the end of 2024. Northvolt informed Reuters that these targets were set on September 5 and are now outdated, without providing current production targets, which are based on customer contracts. Northvolt, seen as a key player to counteract China's dominance in the electric vehicle battery market, laid off 20% of its global workforce and downsized operations in September to remain viable. The company, led by a former Tesla executive, is yet to achieve profitability and has lost a significant contract worth €2 billion with BMW. There are discussions about potentially filing for Chapter 11 bankruptcy protection in the U.S. due to ongoing issues with delivery delays and the inability to produce enough high-quality batteries. A review of internal documents indicates that Northvolt continues to struggle with production rates. For instance, during the week starting October 21, only 22,000 shippable cells were produced against a target of 30,000. By November 10, production reached over 20,000 shippable cells, falling short of a goal to reach 100,000 cells weekly by year's end, which the company previously announced as part of a ‘Path to 100k’ initiative. Northvolt acknowledged that it would not meet this goal this year, marking the first time it has made this admission. The company is currently reviewing its operational strategy after launching a strategic review in July, resulting in adjustments to customer orders and reduced shifts. Despite these challenges, Northvolt maintains it has made significant progress throughout the year and has tripled its cell manufacturing levels since January. However, internal reports show that it has only produced over 51,000 cells in a week once between late August and early November, with around 26,000 cells produced the last week of data available. The production process can lead to a reduction in cells deemed ready for delivery due to quality checks. The company's issues stem from malfunctioning machinery, inadequate staffing, and overly ambitious goals, claims some unnamed sources. Northvolt disputes this characterization, asserting strong performance levels for its production machines and claiming its workforce is highly skilled. Experts note that weekly production levels in battery manufacturing can vary significantly due to the complexities of the process. Despite its difficulties, Northvolt is considered to be performing better than other European battery manufacturers. In late October, operations were halted at one of its manufacturing facilities, and as of November 11, the company stopped its 24/7 production cycle, opting to work only on weekdays. This reduction in production is intended to enhance cell quality and improve maintenance efficiency. Following the loss of the BMW contract, Northvolt is now primarily supplying cells to truck manufacturer Scania and automotive brands Audi and Porsche, both part of its major shareholder Volkswagen Group. Scania reported receiving Northvolt cells as scheduled after establishing a new delivery agreement, having previously faced delays in shipping electric trucks due to Northvolt's challenges.