Northvolt subcontractors mulls Japanese firm support

Japanese trading firm DJK Group is offering financial support to South Korean battery equipment maker who are planning to export their goods to Swedish battery company Northvolt, TheElec confirmed.

DJK has also suggested the equipment makers form a consortium to better react to the order.

Northvolt’s order is becoming bigger __ and the collateral deposit has also concurrently risen, which individual equipment makers may find difficult to handle on their own.

Multiple companies __ from assembly to electrolyte equipment makers __ are expected to join the consortium. However, PNE Solution, whose contract with Northvolt is relatively small, has refused to join.

DJK will stand in for the consortium to provide the cash collateral. In return, it will collect commission from the South Korean equipment companies.

However, Northvolt doesn’t want this as such arrangement will increase equipment unit prices.

The Swedish battery maker requires around 30% of the contract worth as collateral. 

South Korean equipment vendors are also desiring to avoid such an arrangement, a person with direct knowledge of the matter said. They are hoping the South Korean government provide a green bond __ bond for eco-friendly projects, they said, for the deal.

DJK Group’s offer is on the table thanks to its ties with South Korean equipment maker CIS. They have a joint venture in Germany.

Northvolt is planning to expand its EV battery production capacity by 20GWh a year through its joint venture with Volkswagen. The company ultimately wants to have a battery production capacity of 150GWh per year by 2030.