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Time of India
2 days ago
- Automotive
- Time of India
Northvolt ramped up production of quality batteries before halting operations, saysn former COO
Bankrupt Swedish battery maker Northvolt had stepped up production of high-quality battery cells at its Skelleftea plant before operations were halted, a former executive said on Friday, a major factor in sealing a deal to sell the company. Northvolt, once seen as Europe's answer to dominant Chinese battery manufacturers, filed for bankruptcy in March and ceased production in June after failing to secure a buyer in time. U.S. battery startup Lyten said on Thursday it would buy most of Northvolt's assets, reviving hopes of a European battery champion. Lyten CEO Dan Cook told Reuters this week that the quality delivered by Northvolt's management team - many of whom are expected to join Lyten - was a key factor behind the deal, and that as yields had already reached the 90% range, ramp up time was expected to be relatively short. Northvolt's former Chief Operations Officer Matthias Arleth said at a press conference on Friday that the company had been producing up to 30,000 high-quality battery cells per week at Skelleftea. It was not clear what role, if any, Arleth will play going forward. Reuters reported in November that Northvolt had missed internal targets for cells deemed good enough to be delivered to clients. Gustaf Sundell, head of ventures and new business at truckmaker Scania, told Reuters on Thursday that the company had been satisfied with the quality of the Northvolt cells it eventually received. However, he said it was too early to determine whether Scania would place orders with Lyten. Piling debts Northvolt's bankruptcy trustee Mikael Kubu said that many creditors would incur significant losses, without giving further details. The company's debt totalled around $8 billion. Unsecured creditors include major shareholders Goldman Sachs and Volkswagen, whose brands Scania, Porsche and Audi, were among Northvolt's customers. Lyten, a Silicon Valley battery startup developing lithium-sulphur cells as a cleaner alternative to lithium-ion, is backed by Jeep-owner Stellantis and U.S. delivery services provider FedEx. The trustee said the acquisition of Swedish assets was expected to close by the end of October with "a bit more time" needed to close abroad.
The Star
3 days ago
- Automotive
- The Star
US startup Lyten to buy bankrupt European battery maker Northvolt
FILE PHOTO: A view of Northvolt factory after the Swedish battery manufacturer filed for bankruptcy, in Skelleftea, Sweden, March 12, 2025. TT News Agency/Jonas Westling via REUTERS/File Photo STOCKHOLM (Reuters) -U.S. battery startup Lyten has agreed to buy most of bankrupt Swedish battery maker Northvolt, it said on Thursday, potentially offering a way back for the European company that was once seen as the region's answer to rivals in Asia. Lyten, a Silicon Valley battery startup developing lithium-sulphur cells as a cleaner alternative to lithium-ion, is backed by Jeep-owner Stellantis and U.S. delivery services provider FedEx. The deal revives hopes for European battery independence after Northvolt - the continent's potential rival to major Chinese electric vehicle battery makers - filed for bankruptcy in March, making it one of Sweden's largest corporate failures and sparking a frantic push to find a buyer. "Our plans are ... in large part to pick up where the Northvolt team left off," Lyten CEO and co-founder Dan Cook told Reuters, declining to disclose the purchase price beyond saying it was at a "substantial discount" to the original asset value. Northvolt's bankruptcy trustee said that the deal defused the risk of "complete shutdown", while Sweden's deputy prime minister Ebba Busch said the deal positioned the country "as key to Europe's energy independence. Northvolt has received much criticism that it had overpromised while failing to deliver battery cells deemed good enough quality for clients, even with help from its biggest customer, truckmaker Scania. Gustaf Sundell, Scania's head of ventures and new business, told Reuters it was too early to say if the group would place orders for batteries with Lyten, but it was happy with the outcome. TARGET MARKETS Lyten hopes to quickly restart the flagship Skelleftea plant in northern Sweden and resume deliveries of lithium-ion battery cells in 2026. In July it acquired Northvolt's energy storage business in Poland, Europe's largest, and is targeting automotive, defence and energy storage markets. Cook said several of Northvolt's former management would be joining Lyten, though not founder and ex-CEO Peter Carlsson. "We are focused on developing to be the leaders in locally sourced, locally manufactured batteries for both the North American and European markets right now," he said. Lyten said in July it had secured more than $200 million in additional equity investment to support its acquisitions and expansion plans. Cook said Lyten would prove its worth to Northvolt's former customers by focusing first on providing high yields to a single customer. Northvolt's order book once totalled more than $50 billion from automakers such as BMW, Volkswagen and Audi. "We actually think they'll come back, perhaps quicker than people believe," said Cook. The deal includes Northvolt's projects in Sweden and Germany, as well as its intellectual property. Work was also underway to acquire its Canadian unit. Before its collapse, Northvolt expanded across the Atlantic but later refocused on Sweden as its financial crisis deepened, selling assets for nominal sums. (Reporting by Marie Mannes and Alessandro Parodi; Editing by Emelia Sithole-Matarise and David Holmes)
Yahoo
12-05-2025
- Business
- Yahoo
How to Think About the Stock Market When Earnings Guidance Becomes Meaningless
Economist Burton Malkiel might have called the stock market 'a random walk,' but investors could at least use earnings guidance by companies as road signs. Now they are largely walking blind. Last week, BMW reiterated its 2025 financial guidance from mid-March, but included the assumption that the Trump administration would roll back some of the more-recent tariff increases starting in July. How Tariffs Are Crushing Small Businesses: 'Nobody in Power Seems to Care' When Leaving the House to Your Heirs Backfires Video of Sean Combs to Play Central Role in Sex-Trafficking Trial This Obscure New York Court Is Set to Decide Fate of Trump's Tariffs The Spring Home Sales Season Is Shaping Up to Be a Dud Though it will take a while, free trade across the U.S., Mexico and Canada 'will be restituted once again,' BMW Chairman Oliver Zipse told analysts last Wednesday. 'The disadvantages are far too big for everybody.' Given that the U.S. and China agreed Monday to suspend most tariffs, following the announcement of a deal with the U.K. last week, there may be some ground for Zipse's optimism. But equity analysts at Deutsche Bank weren't as certain following the earnings report. 'Obviously not everyone shares BMW's optimism,' they wrote to clients. While unorthodox, the German carmaker's predictions are one way to cope with the fact that nobody knows what the economy will look like in a few months' time. Ford, Jeep-owner Stellantis, Delta Air Lines, and UPS took another route, scrapping their 2025 guidance altogether. Others, such as General Motors, PepsiCo and Procter & Gamble, have lowered targets, while Volkswagen excluded tariffs from its outlook. United Airlines, creatively, offered one scenario for a stable environment and another for a recession. The current median expectation by Wall Street is that the S&P 500's earnings-per-share growth over the next 12 months will be 8.9%, which amounts to a forward price/earnings ratio of 20.6—historically elevated but in line with the average of the past five years. Here is the problem: Analysts take their cues from the same corporate executives who are now issuing meaningless forecasts. In reality, the index could be much more expensive than it looks. Goldman Sachs still sees a 45% chance of a recession over the next 12 months. Yet, after almost entering a bear market on April 8, the S&P 500 is now only about 4% below where it was at the start of the year. To be sure, a downturn is less likely than a month ago. President Trump has de-escalated his trade war, and official data for April showed no big deterioration in the job market, contradicting what 'soft' survey indicators were suggesting. Also, analysts aren't fully oblivious to the risks ahead: Despite first-quarter earnings figures coming in strong and more companies than average upgrading their second-quarter guidance, brokers still revised down their estimates for the second quarter by 2.4% in April—much more than they usually do. And they are applying larger downgrades to forecasts starting a year from now or later, which has historically been a decent predictor of the economy cooling. An argument can thus be made that investors are factoring in some chance of a recession or at least a severe slowdown, but also balancing that against a potential economic pop once U.S. consumers and businesses, which still have strong finances, make it through the next few months of chaos. This doesn't really make sense, though. Even if economic uncertainty itself ends up having no ill effect, it has now been confirmed that Trump's trade deals will leave many of the recently announced tariffs in place, which means import-cost increases are coming. Companies will soon need to either accept lower margins or push up prices, which will affect sales. Crucially, forward profit expectations for the S&P 500 and technology stocks in particular were already being downgraded before the trade war started. For reference, recessions typically involve a fall in earnings of 20% or more. Assuming a very benign scenario in which earnings-per-share growth fell simply to the five-year average of 7.9% and the forward P/E ratio rose back to the maximum around which it has hovered in recent years, which is 22, the S&P 500 would still have only about 6% upside. That isn't much when cash yields 4%. Rather than focus on shaky forecasts, however, investors 'may start gravitating toward looking at trailing earnings, because those are the ones that are real,' said Matt Stucky, chief equities portfolio manager at Northwestern Mutual. They might already be doing that to a certain extent. Cheap 'value' stocks, which have been very unloved over the past decade and a half relative to fast-growth Silicon Valley giants, have become the outperformers this year. 'There isn't a whole lot of hope priced into value stocks, but valuation gives you a cushion whereas hope doesn't,' said M&G Investments's Fabiana Fedeli. But this could ultimately make for a pretty bearish overall market, given that the promise of artificial intelligence remains the cornerstone of the U.S. investment case. If backward-looking P/E ratios are to be believed, valuations are extremely frothy, not far from those of the dot-com bubble. Wall Street veteran Jim Paulsen proposes another rule: Since the end of World War II, S&P 500 returns have closely followed a logarithmic line upward. And, while the current upward deviation isn't close to 1999 levels, returning to the trend over the next year would still imply a 15% fall. Perhaps investors should just diversify as much as they can and have a bias toward 'quality' companies with features such as balance sheets that can withstand extreme outcomes. Avoiding China-focused names such as Apple, this could argue for keeping the faith in market favorites such as Costco, Meta Platforms and Mastercard. Still, none of today's obscured investment paths might lead to particularly large gains. Write to Jon Sindreu at Tariff Shock Reverberates in the Bond Market My Friends and I Are Rethinking Our Spending Because of Economic Anxiety United and American Are in a Turf War at Chicago's O'Hare Gold Futures Slide on U.S.-China Trade Optimism But Uncertainty Remains EV Battery Giant CATL Plans to Raise Around $4 Billion in Hong Kong Listing Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
