Lyten, a Silicon Valley battery startup, announced today that it’s acquiring manufacturing assets from Northvolt, a Swedish battery manufacturer that’s facing a cash crunch.
As part of the deal, Northvolt is selling manufacturing equipment the company inherited in its 2021 acquisition of Cuberg, another battery startup. Lyten will also assume the lease of Cuberg’s old manufacturing facility in San Leandro, California. Lyten will invest $20 million next year to expand facilities in San Leandro and its existing operations in San Jose.
Neither Lyten nor Northvolt immediately replied to questions about the deal’s financial terms.
Unlike many other battery manufacturers, Lyten isn’t relying on nickel, cobalt, manganese, or even iron for its cathode materials. Instead, it’s using cheap and abundant sulfur mixed into a graphene matrix. On the anode side, it doesn’t use any graphite, a material which faces export restrictions from China. The company says the combination results in cells that have greater energy density than nickel-manganese-cobalt flavors but are cheaper to produce than low-cost lithium-iron-phosphate.
Northvolt has been struggling lately. The company has struggled to scale up production of lithium-ion batteries, and it missed delivery of a large order from BMW, which nudged the automaker to nullify a €2 billion contract.
To conserve cash, the company announced in August that it would shutter research and development at the Cuberg site, laying off nearly 200 employees. Then in September, it said that it was laying off an additional 1,600 employees, about 20% of its workforce, and that it had halted two planned factory expansions.
It’s unclear whether that cost-cutting and deal with Lyten will be enough to help Northvolt get through the coming 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 on the skids, Lyten appears ascendent.
The San Jose-based startup is planning to break ground next year on a factory in Nevada with a planned capacity of 10 gigawatt-hours. When complete, the $1 billion facility will produce lithium-sulfur batteries destined for micromobility vehicles like scooters and e-bikes, and defense and space applications like drones and satellites. The company expects it to come online in 2027.
Lyten’s purchase of Northvolt’s Cuberg assets give it the equipment and space to produce up to 200 megawatt-hours of lithium-sulfur batteries in the Bay Area. That should give the company some revenue while it prepares its larger factory in Nevada.
Lyten has raised $476 million to date at a $1.17 billion valuation, according to PitchBook, including a $200 million round that closed last year.