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Lyten to restart Northvolt's halted production plants -CEO

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Lyten CEO: Deal will speed up lithium-sulfur production

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BMW says Lyten will only be considered for future projects

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FACTBOX: Competing battery technologies shape EV

industry

By Marie Mannes, Alessandro Parodi and Gilles Guillaume

STOCKHOLM, Aug 25 (Reuters) - Silicon Valley startup

Lyten will need to convince carmakers it can succeed where

bankrupt Swedish EV battery maker Northvolt failed - creating a

European champion to reduce the region's reliance on China.

Lyten, which develops lithium-sulfur batteries, unexpectedly

announced on August 7 it was buying Northvolt's assets, offering

a lifeline to future European battery production for electric

vehicles.

But customers and investors burned by the Northvolt

experience remain wary of committing without seeing a proven

product that can be delivered at scale, interviews with over a

dozen battery industry experts, analysts and car company sources

revealed.

As well as taking on Northvolt's production of lithium-ion

batteries, Lyten plans to develop its own lithium-sulfur

batteries for EVs, but will need substantial funds and lacks the

Swedish company's erstwhile $50 billion order book.

Lithium-sulfur cells are one of several next-gen battery

chemistries, promising a lighter, lower-cost alternative and

lower dependence on critical minerals from China, but are still

in their infancy.

Lyten currently produces lithium-sulfur cells at a pilot

plant in Silicon Valley.

Jeep-owner Stellantis ( STLA ) has - with a 2% stake -

been in partnership with Lyten since 2023 to explore

applications of Lyten's lithium-sulfur technology, including for

battery cells, lightweight composites and on-board sensors.

A Stellantis ( STLA ) spokesperson said any supply deals would depend

on technical validation, industrial scale-up, local production

capacity and commercial terms.

Northvolt, despite attracting backers including Goldman

Sachs ( GS ), collapsed with $8 billion in debt in March after losing

orders and key investor support, and missing production targets.

Carmakers scaling down their electrification plans have also hit

EV battery demand.

Northvolt's flagship factory in Skelleftea, Sweden, however,

was starting to turn around in the weeks before closure, ramping

up production to 30,000 lithium-ion cells a week.

Lyten CEO Dan Cook told Reuters that he hopes Northvolt's

previous customers - which included Volkswagen brands - will

return if the company proves itself by delivering consistently

to a single, undetermined, customer at low volumes with good

quality.

Former Northvolt-backer Scania said it was too early to

discuss ordering cells from Lyten. Volvo Cars, which had

partnered with Northvolt via its nascent battery unit Novo

Energy before cutting ties, declined to comment on whether it

would place orders.

"Lyten is not a name anyone would have associated with

lithium-ion manufacturing until 24 hours ago," said James Frith,

at battery-tech focused venture capital Volta Energy

Technologies, shortly after the deal was announced.

A person familiar with Stellantis ( STLA )-backed battery maker ACC,

another contender to be a European battery champion, said ACC is

in talks with three former Northvolt clients, but no new

contracts are expected before mid-2026.

RECHARGING HOPES

Lyten has not said how much it paid for Northvolt's assets,

only that it bought them at a "substantial discount", fully

funded through equity investment from private investors.

Cook told Reuters that Lyten had a strong investor base

including money managers and high-net-worth individuals, which

had expanded following the Northvolt transaction.

"This allows us to create syndicates of investors, and from

that base we will continue to receive large investments," Cook

said.

The company plans further large capital raises and aims to

tap European grant programmes such as the European Union's

battery booster package.

BMW, which cancelled a 2 billion euro ($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".

"In this respect, Northvolt's successor would only be

considered for a future battery cell project - that is still a

long way off, and we cannot comment on it at this stage," a BMW

spokesperson said.

A battery scientist at another European carmaker, who

declined to be named, said the firm backed away from working

with Lyten six months ago because it was only producing at R&D

scale. Still, the Northvolt deal could help reopen doors for

additional talks with carmakers, the person added.

'VALLEY OF DEATH'

Acquiring Northvolt's production and R&D facilities would

enable Lyten to reach large-scale lithium-sulfur EV battery cell

production by 2028, rather than its previous, end-of-the-decade

forecast, Cook said.

But experts caution that lithium-sulfur is unlikely to be

viable for cars before 2030.

Lyten faces competition from the likes of Germany's

Theion, Australia-based Gelion and Zeta Energy in the U.S.,

which also has a partnership with Stellantis ( STLA ), in the race to

develop cells for EVs. Chinese battery giants, such as 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.

Chief sustainability and marketing officer Keith Norman said

Lyten was already two years into working with automaker partners

on testing lithium-sulfur.

"We believe the market will continue to be surprised at the

pace we bring lithium-sulfur into a wide range of markets," he

said.

Northvolt built probably "one of the most advanced battery

research centres in Europe," Norman told Reuters. "We have a

very deep battery research and materials research capability in

Silicon Valley. ... so we think that (linking the two) is going

to allow for rapid innovation of batteries."

Still, Emma Nehrenheim, a former Northvolt executive

recently appointed head of the European Battery Alliance, said

it would take over five years and government subsidies for

European battery makers to cross the so-called "death valley" of

unprofitable production and become competitive with their Asian

counterparts.

"Governments and investors need to understand that China

spent 15-20 years and north of $150 billion to get where they

are today, and if you think you can shortcut it then you just

don't understand batteries," said Rob Anstey, CEO at silicon

battery anodes developer GDI.

($1 = 0.8623 euros)