Lyten buys battery production assets from beleaguered Northvolt

Silicon Valley battery startup Lyten announced today that it’s acquiring manufacturing assets from Northvolt, a cash-strapped Swedish battery maker.

As a part of the deal, Northvolt is selling manufacturing equipment the corporate inherited through its 2021 acquisition of Cuberg, one other battery startup. Lyten may also take over the lease of the old Cuberg manufacturing facility in San Leandro, California. Lyten will invest $20 million next yr to expand its San Leandro facilities and existing operations in San Jose.

Neither Lyten nor Northvolt immediately responded to questions on the financial terms of the deal.

Unlike many other battery manufacturers, Lyten doesn’t use nickel, cobalt, manganese and even iron in its cathode materials. Instead, it uses low cost and abundant sulfur mixed with a graphene matrix. The anode side doesn’t use graphite, a surface-facing material export restrictions from China. The company claims that this mix creates cells which have the next energy density than nickel-manganese-cobalt cells, but are cheaper to provide than inexpensive lithium iron phosphate.

Northvolt has been having problems currently. The company struggled to ramp up production of lithium-ion batteries and failed to satisfy a big order from BMW, prompting the automaker to cancel a €2 billion contract.

To get monetary savings, the corporate announced in August that it could achieve this snapshot research and development on the Cuberg plant, shedding almost 200 employees. Then in September it said it was shedding a further 1,600 staff, or about 20% of its workforce, and that it had halted two planned factory expansions.

It is unclear whether cost cutting and the Lyten deal can be enough to assist Northvolt survive the approaching yr. Last week, Bloomberg reported that Northvolt needs to lift almost $1 billion to present itself some respiration room; According to reports, the corporate’s operations generate costs of roughly $100 million monthly.

While Northvolt is slipping, Lyten appears to be growing.

The San Jose-based startup plans to begin constructing a factory in Nevada next yr with a planned capability of 10 gigawatt hours. Once accomplished, the $1 billion facility will produce lithium-sulfur batteries for micro-mobility vehicles reminiscent of scooters and electric bicycles, and for defense and space applications reminiscent of drones and satellites. The company expects to come back online in 2027.

Lyten’s purchase of Northvolt’s Cuberg assets gives it equipment and space to provide as much as 200 megawatt-hours of lithium-sulfur batteries within the Bay Area. This should provide the corporate with some revenue while it prepares a bigger factory in Nevada.

According to PitchBook, Lyten has raised $476 million up to now at a $1.17 billion valuation, which incorporates a $200 million round that closed last yr.