Once Swedish, Now Finnish: Northvolt Powers Down with Bankruptcy

How the China-Driven ESG Agenda is Crushing Institutional Investors and the Automotive Industry

The collapse of Northvolt’s ambitious plans to dominate the European EV battery market is more than a cautionary tale—it’s a flashing red light for institutional investors like Goldman Sachs, BlackRock, and others, who have tied their strategies to ESG-driven agendas and the unrealistic promises of a rapid energy transition.

Sweden based Northvolt, once celebrated as Europe’s best hope for challenging China’s dominance in battery manufacturing, is now slashing 1,600 jobs, parking expansion plans, and abandoning its all-in-one business model. The reasons are clear: slower-than-expected EV demand, stiff competition from China’s 85% share of global battery production, and the crushing costs of scaling up production in a market distorted by political mandates.

Despite raising $15 billion from institutional heavyweights like Goldman Sachs and BlackRock, Northvolt burned through cash, posting a staggering $1.2 billion loss in 2023—up from $285 million the year prior. With less than 1 GWh of battery production at its Swedish facility, the company’s dream of producing 60 GWh annually to support over a million EVs lies in tatters.

This debacle exposes the broader folly of institutional investors who have blindly embraced ESG (Environmental, Social, and Governance) principles, net-zero pledges, and the energy transition as sacrosanct. By steering trillions in assets under management (AUM) toward politically favored sectors like electric vehicles, these firms have enabled policies that distort markets, punish traditional industries, and harm long-term economic stability.

The EV mandates driving Northvolt’s struggles—and the billions lost by Ford, GM, and Stellantis in their own EV ventures—are emblematic of the broader “Green New Scam.” Automakers, compelled by regulatory credits and ESG pressures, produce EVs even as consumers reject them and losses mount. Meanwhile, ICE (internal combustion engine) vehicle buyers, taxpayers, and ratepayers are forced to subsidize this agenda, enriching elites while burdening working families.

Northvolt’s failure underscores an inconvenient truth: ESG-driven investment strategies are detached from economic reality. Investors that have trusted Goldman Sachs, BlackRock, and the like with their dollars should be demanding answers about the wisdom of funneling billions into a market dominated by China and undermined by overzealous mandates.

China’s 85% control of global battery production is no fluke—it reflects deliberate industrial policy, massive state subsidies, and a strategic focus on global dominance. By contrast, ESG-focused investors have championed so-called ‘green’ technologies without accounting for the geopolitical and economic risks. Financial institutions like Goldman Sachs and BlackRock, committed to the UN Principles for Responsible Investment (UNPRI), have abandoned fiduciary responsibility, pushing agendas that strengthen China’s grip on critical industries and expose investors to catastrophic losses.

It’s time for institutional investors to abandon their blind allegiance to ESG and refocus on investments that create real value for shareholders, industries, and the economy. Northvolt’s collapse is a warning: markets distorted by political agendas and unsustainable mandates are not just risky—they’re disastrous. This is the “Green New Scam” President-elect Donald Trump has vowed to dismantle.

For the automakers hemorrhaging billions on EVs to satisfy deep state mandates, and for the institutional investors enabling these losses, the reckoning is overdue. The opportunity to revitalize the American automotive industry lies in ending deep-state EV mandates and allowing market forces—not political agendas—to guide the future of transportation and energy.

Northvolt’s failure is a story of misaligned priorities, distorted markets, and misguided investments. If institutional investors like Goldman Sachs and BlackRock continue doubling down on ESG-driven mandates, they risk not only financial losses but their credibility and the economic future of the industries they claim to champion.

The solution is clear: stop taking cues from ESG playbooks and start investing in projects grounded in economic reality and consumer demand. Otherwise, the next Northvolt-style collapse is inevitable.