Lyten, a Silicon Valley startup, faces the monumental task of convincing carmakers it can succeed where the bankrupt Swedish EV battery maker Northvolt failed—establishing a European champion to reduce the region’s reliance on China.
On August 7, Lyten, a company that develops lithium-sulfur batteries, unexpectedly announced it was acquiring Northvolt’s assets, offering a potential lifeline to future European battery production for electric vehicles. However, customers and investors who were burned by the Northvolt experience remain wary of committing without seeing a proven product that can be delivered at scale, according to interviews with over a dozen industry experts, analysts, and car company sources.
The Roadblocks Ahead for Lyten
In addition to taking on Northvolt’s production of lithium-ion batteries, Lyten plans to develop its own lithium-sulfur batteries for EVs. However, this will require substantial funding, and the company lacks Northvolt’s former $50 billion order book.
- Nascent Technology: Lithium-sulfur cells are a next-gen battery chemistry that promises a lighter, lower-cost alternative and reduced dependence on critical minerals from China, but the technology is still in its infancy. Lyten currently produces these cells at a pilot plant in Silicon Valley.
- Skepticism from Investors and Customers: Northvolt, despite attracting backers like Goldman Sachs, collapsed with $8 billion in debt in March after losing key investor support and failing to meet production targets. Carmakers scaling down their electrification plans have also hit EV battery demand.
- Cautious Automakers: Jeep-owner Stellantis, which holds a 2% stake in Lyten, stated that any supply deals would be dependent on technical validation, industrial scale-up, and local production capacity. Similarly, BMW has expressed that any potential deals are still a “long way off” due to the long lead times required for battery cell supply.
Hopes and Hurdles for the Future
Lyten’s CEO, Dan Cook, told Reuters he hopes Northvolt’s previous customers, which included Volkswagen brands, will return if Lyten can prove itself by consistently delivering good quality products to a single, as yet undetermined, customer. However, former Northvolt backers like Scania and Volvo Cars have stated that it’s too early to discuss new orders.
Lyten has not disclosed the purchase price for Northvolt’s assets, only that it acquired them at a “substantial discount,” fully funded through equity investment from private investors. The company plans further large capital raises and aims to tap into European grant programs.
- Timeline to Production: Lyten claims that acquiring Northvolt’s facilities will allow it to reach large-scale lithium-sulfur EV battery cell production by 2028, ahead of its previous forecast. Still, experts caution that lithium-sulfur is unlikely to be viable for cars before 2030.
- Competition: Lyten faces competition from companies like Germany’s Theion, Australia-based Gelion, and the U.S.’s Zeta Energy in the race to develop next-gen cells. Chinese battery giants, such as CATL, currently dominate the global market but are more focused on solid-state batteries, which are further along in development.
- The “Valley of Death”: Emma Nehrenheim, a former Northvolt executive, said it would take over five years and significant government subsidies for European battery makers to cross the so-called “death valley” of unprofitable production and become competitive with their Asian counterparts. Expert Rob Anstey added that China spent 15-20 years and over $150 billion to reach its current position, a reality that new players must understand.
For Lyten to succeed, it must not only overcome significant technical challenges but also regain market trust and attract the long-term investment needed to become a competitive force in the global battery market.
