Silicon Valley battery startup Leiten announced today that it will acquire manufacturing assets from struggling Swedish battery maker Northvolt.
As part of the deal, Northvolt will sell the manufacturing facilities it inherited when it acquired another battery startup, Qberg, in 2021. Leiten will also assume the lease of Kuberg's old manufacturing facility in San Leandro, California. Leiten plans to invest $20 million next year to expand its San Leandro facility and existing operations in San Jose.
Neither Mr. Leiten nor Mr. Northvolt immediately responded to questions about the financial terms of the deal.
Unlike many other battery manufacturers, Lyten does not rely on nickel, cobalt, manganese, or even iron as cathode materials. Instead, it uses cheap and abundant sulfur mixed into the graphene matrix. The anode side does not use any graphite, which is subject to export restrictions from China. The company says this combination results in a battery that has a higher energy density than nickel-manganese-cobalt flavors, but is cheaper to manufacture than lower-cost lithium iron phosphate.
Northvolt has been struggling lately. The company has struggled to scale up production of lithium-ion batteries and missed delivery deadlines for large orders from BMW, prompting BMW to void a 2 billion euro contract.
To conserve cash, the company announced in August that it would close research and development at its Kueberg location and lay off nearly 200 employees. In September, the company announced it was laying off an additional 1,600 people, or about 20% of its workforce, and canceling two planned factory expansions.
It's unclear whether the cost savings and the deal with Leiten will be enough to get Northvolt through next year. Last week, Bloomberg reported that Northvolt needs to raise nearly $1 billion to give it some breathing room. The company's operations reportedly burn through about $100 million a month.
While Northvolt is out of form, Reiten looks dominant.
The San Jose-based startup plans to break ground on a 10-gigawatt-hour factory in Nevada next year. Once completed, the $1 billion facility will produce lithium-sulfur batteries for micro-mobility vehicles such as scooters and electric bicycles, as well as defense and space applications such as drones and satellites. The company expects to go online in 2027.
Leiten's purchase of Northvolt's Kueberg assets gives it the equipment and space to produce up to 200 megawatt-hours of lithium-sulfur batteries in the Bay Area. This should give the company some revenue while it prepares a larger factory in Nevada.
To date, Lyten has raised $476 million at a valuation of $1.17 billion, including a $200 million round that closed last year, according to PitchBook.