Lyten Faces Steep Challenge in Reviving Northvolt’s European Battery Ambitions

An offshoot of Silicon Valley, Lyten, has purchased the assets of the bankrupt Swedish battery manufacturer Northvolt in an attempt to revive Europe’s homegrown aspirations for an electric vehicle (EV) battery industry in the region. This news came out on August 7, and it has certainly piqued the attention of the automotive and energy industries. Analysts and carmakers will now start to assess if Lyten can succeed in the areas where Northvolt struggled.

Lyten’s Reputation and Plans

Lyten’s reputation comes from its works on lithium-sulfur batteries. The company now has plans to manufacture conventional lithium-ion cells from Northvolt’s facilities, as well as develop lithium-sulfur cells for EVs. Skepticism remains due to Northvolt’s bankruptcy caused by $8 billion in debt along with a falling order book and production backlog. Lyten also lacks Northvolt’s established customer base.

The Northvolt Legacy

Northvolt was spearheading Europe’s EV battery industry and attempting to challenge China’s dominance while serving European OEMs such as Volkswagen and Volvo. Despite backing from investors like Goldman Sachs, Northvolt struggled with production scaling, eventually collapsing in March 2025. This created an opportunity in European battery production that Lyten is now attempting to capitalize on.

Lyten’s Plans and Challenges

Currently, Lyten is working on lithium-sulfur cells at a pilot plant in Silicon Valley that are lighter, cheaper, and less dependent on Chinese critical minerals. However, the technology is still immature and may not be commercially viable for EVs until the 2030s. Lyten hopes to attract previous Northvolt customers by demonstrating consistent quality at low volumes. More details on these developments are available on BizRush.

Cautious European Automotive Manufacturers

European automakers remain cautious despite the acquisition. Stellantis, a 2% stakeholder in Lyten, has been exploring lithium-sulfur applications since 2023. BMW, having canceled a €2 billion order with Northvolt due to quality issues, emphasized the long-term nature of battery supply deals. Other sponsors such as Scania and Volvo Cars have postponed talks or made no commitments. Lyten faces a tough path convincing automakers, demonstrating scale, and competing with battery giants like CATL.

Funding and Support

Lyten did not disclose the exact purchase price but confirmed the acquisition was funded by private equity at a substantial discount. The company has a robust investor base and aims to benefit from European government incentives, including the EU battery booster package. Collaboration between Northvolt’s European R&D facilities and Lyten’s Silicon Valley expertise could accelerate battery innovation.

‘Valley of Death’ for European Battery Makers

Experts highlight challenges ahead, often referred to as the “valley of death”, which combines investment, operational efficiency, and time. Catching up with established Asian competitors may require decades of investment. Lyten faces competition from emerging companies like Australia’s Gelion, Germany’s Theion, and U.S. startup Zeta Energy. Lithium-sulfur adoption in EVs remains a long-term goal.

Market Context

Automakers are adjusting EV production due to slumping demand, supply chain issues, and raw material costs. Northvolt’s collapse coincided with these challenges, intensifying skepticism for new entrants like Lyten. Even if scaled, Lyten must contend with mature Chinese and South Korean battery producers.

What Comes Next

Lyten aims to achieve low-volume production milestones while validating lithium-sulfur technology. Winning small contracts with automakers could boost investor confidence. The Northvolt acquisition adds production and R&D capabilities, but trust must be rebuilt through scale, reliability, and quality. Further capital raises and European grants are critical for scaling and innovation.

Key Takeaways

• Lyten acquires Northvolt assets: Reviving Europe’s EV battery ambitions with lithium-ion and lithium-sulfur technology.
• Automakers remain cautious: Previous Northvolt customers require proof of scale, quality, and reliability.
• Funding is secured: Acquisition fully equity-funded with plans for further investor syndicates and EU backing.
• Technology challenges: Lithium-sulfur cells are still in R&D, with commercial adoption likely after 2030.
• Competitive landscape: Lyten competes with European, Australian, U.S., and Chinese battery producers.
• Long-term outlook: Success depends on navigating the ‘valley of death’ and sustaining production efficiency while regaining customer trust.