Lyten’s Northvolt Revival Faces Headwinds as Investors Demand Proof of Commercial-Scale

After agreeing to acquire Northvolt’s assets, US battery startup Lyten will have to convince electric vehicle manufacturers that it can reduce Europe’s reliance on Chinese battery supply. According to Reuters, investors and customers remain cautious about Northvolt revival and want to see proof of commercial scale before committing to Lyten.

Lyten bought Northvolt assets in a move that offered a lifeline to European battery production for EVs after signing a deal to acquire the company’s remaining facilities in Sweden and Germany early on August 7 2025. The company will also be taking over Northvolt’s lithium-ion battery production lines.

Expanding Lithium-Sulfur Battery Production

Sources close to the California-based firm say Lyten European battery revival will involve expansion of lithium-sulfur battery production to Europe. These cells are among a few next-generation battery technologies that promise a lighter, more-cost effective alternative with lower dependence on China’s rare minerals. The technology is however at its infancy having been developed in Lyten’s pilot plant in Silicon Valley.

But as Lyten prepares to expand operations to Europe, Northvolt’s legacy in the region poses a real challenge. Missed deadlines, caution from key automakers, and an $8 billion debt present huge hurdles for Lyten’s new venture. Northvold collapsed in March 2025 after losing important investor support, orders, and missing production targets despite attracting funders like Goldman Sachs.

European vehicle manufacturers like Volkswagen and BMW have withheld their commitment as they seek proof of commercial scale. Stellantis, which has held a 2% stake in Lyten since 2023 has also demanded evidence of reliable supply and performance before committing to future deals. A spokesperson from the Jeep-owner said supply deals with Lyten will be determined by technical validation, commercial terms, local production capacity, and industrial scale-up.

Viability of Lithium-Sulfur Batteries in Question

Lyten CEO Dan Cook says his company will be able to scale production of lithium-sulfur EV batteries faster after acquiring Northvolt’s production and research facilities. Experts say Lyten lithium-sulfur pilot production may not be viable for vehicles before 2030. However, the company says it has already spent two years working with vehicle manufacturers to test lithium-sulfur batteries.

“We believe the market will continue to be surprised at the pace we bring lithium-sulfur into a wide range of markets. We have a very deep battery research and materials research capability in Silicon Valley. Northvolt built one of the most advanced battery research centres in Europe, we think that (linking the two) is going to allow for rapid innovation of batteries.” A former Northvolt executive, who now serves , said it will take government subsidies and more than five years for EU battery manufacturers to compete against Chinese battery makers.

“Governments and investors need to understand that China spent 15-20 years and north of $150 billion to get where they are today, and if you think you can shortcut it then you just don’t understand batteries,” Battery Anodes Developer and CEO of GDI, Rob Anstey said.

Facing Stiff Competition

Lyten faces tough competition from US-based Zeta Energy, Germany’s Theion, and Australia’s Gelion in the EV battery industry. The company is also facing stiff competition from Chinese-based CATL, which currently dominates the battery market globally. The Chinese firm makes semi-solid to solid-state batteries, which are more developed compared to lithium-sulfur cells. In December 2024, CATL sought to list on the Hong Kong stock exchange in a bid to expand its global presence and market.

To succeed in the European market, Lyten will require strong support from government, financial muscle, and innovation. The company remains hopeful that Northvolt’s former customers will return once the company delivers high quality batteries at low volumes consistently to a single customer.

Northvolt’s Skelleftea plant in Sweden was beginning to turn around weeks before the acquisition deal was signed with production rising to 30,000 lithium-ion batteries per week. Former Northvolt investor, Scania, argues that it’s still early to talk about ordering batteries from Lyten. Others like Volvo cars declined to say whether they would place orders.

“Lyten is not a name anyone would have associated with lithium-ion manufacturing until 24 hours ago,” James Frith of Volta Energy Technologies said soon after shortly after the deal was announced.

Sources close to ACC, a battery manufacturer that has been supported by Stellantis and a competitor in the EU market, said the company is already talking to three former Northvolt customers.