🏹 The string snapped, but draw the bow again

One morning in the fall of 1899, a dead-tired future Nobel Prize winner, Verner von Heidenstam, staggered out of his study, opened the pantry, and downed a glass of brännvin, a very strong Nordic liquor. He had been up all night producing a poem, "Invocation and Promise," with a line that all Swedes would know more than a hundred years later:

"Fairer the sound of the string that snapped, than never stretching the bow."

Last week, Northvolt, which had the ambition to produce the world's greenest battery, went bankrupt. This is sad for many reasons, but what makes me angry is the schadenfreude. I understand that many take the opportunity to say "I told you so," but how can one rejoice that the string broke?

Above all, there is a witch hunt against Northvolt's founder, Peter Carlsson. He sold approximately five percent of his shares in Northvolt between 2019 and 2022. Now a number of memes are circulating where it's portrayed as if he sold them just before the bankruptcy. People who can't even be bothered to Google are babbling about insider trading.

I don't like his share sales either. It's not classy, and the company seems to have been guilty of several excesses, like ridiculously expensive lawyers. But when the focus lands there, side issues become main issues.

The main issue is something else: Northvolt failed to get its battery production up and running. That was Northvolt's and Peter Carlsson's decisive mistake.

I don't know the reason for this, but from my outside perspective, I see a prime suspect in the form of rapid expansion to more factories and several side projects before they managed to start producing and selling batteries.

Tesla is a good example. Their giga factory in Nevada is built in modules, allowing them to learn from mistakes with each module, making the next one better and cheaper.

Several critics point to the availability of cheap money, doped by large state loan guarantees and other support. The largest investors were private, with Volkswagen and Goldman Sachs leading, but about 40 percent of the more than $20 billion in investments and loans came from the state, such as loan guarantees from the Swedish National Debt Office and loans from the European Investment Bank. (Several of the loans and guarantees have not been used.) This may certainly have contributed to the overconfidence to expand as quickly as Northvolt did.

No green bubble

I continue, however, to object to the claim that Northvolt was a pipe dream or a green bubble, as is now widely claimed. I wrote about this last year, and my argument can be summarized like this:

"A positive spiral of increased production of solar, wind, batteries, and electric vehicles leads to lower prices for customers, resulting in more orders, increased production, even lower costs, and so on. We have both an economic drive and a need for climate transition working together."

Thus, there is a rapidly growing market for batteries. But the falling prices also lead to problems:

"There is no guarantee that Northvolt will succeed. A challenge for all battery manufacturers is the rapidly falling price of batteries. When you have large investments in factories and development, while being able to charge less and less for your product, survival is hard."

In Northvolt's case, there wasn't even a product to charge for, as no batteries were manufactured.

Hate failure, not those who failed

Of course Peter Carlsson and the other leading figures at Northvolt deserve criticism. After all, they have failed. (Although my guess is that they are their own harshest critics.) But this must be balanced with two thoughts:

First, how damn difficult it is to start something as big as a battery company. Even if you make better decisions than Northvolt did, the risk of failure is high. Just look at how close to death Tesla has been several times.

Second, a tribute to how tightly the bow was drawn. We need many more who take on enormous projects like Northvolt. Serial entrepreneur Mikael Pawlo writes in Di: "...without risk-takers like Peter Carlsson, society stagnates. Hate failures, but don't hate those who fail."

Draw the bow again

Verner von Heidenstam's poem "Invocation and Promise" is a call to accomplish great deeds. To achieve this, we need to take risks, and he believes it is better to go under than to slowly fade away. To such a people, he swears his loyalty.

I don't know what Peter Carlsson needs to come back. Perhaps, like Heidenstam, he should start by downing a glass of hard liquor. To Peter and others like him, I say: Draw the bow again! Even if the string breaks, you have my loyalty.

"Such is our love, that even in death, our love would awaken thee.
If nights grow sleepless, and resting-place cold, we fail thee not on thy path."

Mathias Sundin
Angry Optimist