US battery startup Lyten faces test after Northvolt collapse

Silicon Valley startup Lyten will need to convince carmakers it can succeed where bankrupt Swedish EV battery maker Northvolt failed.

The challenge is to build a European champion that can reduce the region’s reliance on China.

The company hopes to scale up production in Europe, but industry experts and carmakers remain cautious until Lyten can demonstrate reliable, large-scale output.

Lyten develops lithium-sulfur batteries and runs a pilot plant in Silicon Valley. It will acquire Northvolt’s lithium-ion assets but not its customer order book.

Stellantis, which owns a 2% stake in Lyten, said any supply deals will depend on validation, industrial scale-up, local capacity, and commercial terms.

BMW, which canceled a major order with Northvolt last year, said it may only consider future projects with Lyten far down the road.

Analysts warn lithium-sulfur technology is still in early stages and may not be viable for EVs before 2030.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ European battery manufacturing struggles persist despite massive investment

Lyten’s acquisition highlights a recurring issue in European battery manufacturing, where substantial funding doesn’t guarantee operational success.

Northvolt raised over $15 billion from investors but still filed for bankruptcy in March 2025 with nearly $6 billion in debt, demonstrating that capital alone cannot overcome execution challenges2.

The scale of Northvolt’s operational struggles was severe. Its main plant in Sweden produced less than 1% of its theoretical capacity in 2023, despite years of development and billions in investment3.

This execution gap reflects broader challenges European battery companies face competing against established Asian manufacturers like CATL and BYD, who have decades of manufacturing experience and refined production processes.

The trend suggests that even well-funded European startups struggle to translate battery technology concepts into commercially viable, large-scale production, which is a critical weakness as automakers increasingly prioritize reliable supply over regional preferences.