Northvolt goes from Europe battery promise to crisis | Hacker News Reader

Northvolt goes from Europe battery promise to crisis

reuters.com

72 pointsxnhbx133 comments

Incredibly embarrassing for Europe and Sweden. Even with billions of investments from the big car companies, investors and many millions in subsidies, they simply couldn’t make it work at all. Instead of buying the California startup just to shut it down, should’ve invested most of their money there instead. They are leaving an enormous eyesore in the northern Sweden landscape with thoudands of people unemployed, many of which may be deported now, with very little to show for it other than many scandals (including paying millions of dollars in bonus to their incompetent executives even as they file for bankruptcy)!

Profits and subsidies are privatized, losses are socialized. That's how the system is designed to work.

This. The system works just as intended. If the state is throwing free money around why wouldn't you pick it up and pocket it? Your job isn't to create jobs or return on investment, it's to funnel that free state money in the pockets of shareholders.

For those looking for another similar example of European subsidized tech failure check the ST-Ericsson story.

China also subsidizes the car and battery industry and in their case, it seems to be working just fine. So a blanket statement of "state subsidies = bad" does not tell the whole story.

Of course, everyone is subsidizing their industries, especially the US and China.

I never made a blanket statement that all state subsidized are bad, I just pointed out some cases of major EU failures which you took as a blanket statement.

This is a bit of a black and white way of putting it. Yes, much state money is wasted, but not all. Some of the money went to Swedish construction workers for example.

>Some of the money went to Swedish construction workers for example

Ah, the myth of trickle down economics.

fiscal multiplier != trickle down

Not in that case: https://sifted.eu/articles/northvolt-bankruptcy-investors-cr...

People keep repeating this as if it was true. The Chinese and American battery manufacturers have received enormous subsidies. This factory is mostly financed on the private market, and some bonds from the EU investment bank, but comparably less.

That hasn't helped. Subsidized competitors are hard to compete against.

The German factory have indeed received some government subsidies. But that is not the factory with problems (at least not yet).

>The Chinese and American battery manufacturers have received enormous subsidies.

Nobody said subsidies are THE problem. The problem is the taxpayer being burdened with the losses while footing the bill for those subsidies, when they should be seeing a return on their investment, while the only ones who saw that were the fat cats.

I'm sick and tied of the race to the bottom without any accountability of "hey look, China is giving billions of state subsidies, so that means we should too".

Not just subsidies, even without them, this factory couldn't operate. The main issue is that there are too few educated workers to support a modern factory. I saw a comment from one of their suppliers on Chinese social media, and I use GPT to translate part of it:

- We, as the supplier, provide battery forming equipment, which includes a series of cells for storage. It's common sense for engineers that nothing except batteries should be placed in these cells. However, they used it to store clutter and notebooks, causing the production line to report errors and stop. Our project manager urgently responded to debug the issue, and their workers even asked where they could put all this mess?

- Regarding explosions. Dust explosion is a common knowledge for engineers. Their explosion happened because they used a regular vacuum cleaner to collect dust from the dust box (which contained metal dust from battery cutting), resulting in a dust explosion. No one knows what their maintenance team was doing. They were also looking for documentation from us, just to shift the blame. There was also another explosion with the oven purchased from a Korean supplier due to management issues that allowed air into the baking equipment.

- Their battery process and technology responsible person knows nothing as well. After we weld batteries, there's a leak testing process for ammonia. This person always asked us if we could use hydrogen because it's cheaper. He had no idea that hydrogen is an explosive gas. I wrote back a response of thousands of words explaining the principles, saying that this was absolutely not suitable because hydrogen itself is flammable and mixed with air would be a highly explosive mixture. He finally gave up on the idea.

Although these are just comments from social media, at least regarding the explosion, there have been other media reports on the issue.

As far as I know, no executives received “millions of dollars in bonuses”. What is your source? And in Sweden and Europe, people are usually not paid in dollars :)

The first Google result for “Northvolt bonuses”: https://swedenherald.com/article/northvolt-wants-to-pay-out-...

And? It is targeting 230 employees, and explicitly excluding top management. Employees at Northvolt are often paid slightly below market, because they also warrants. But considering those warrants are probably not worth much anymore, the bonus may be necessary to retain necessary talents.

"wants to", meaning they haven't

Since northvolt is private, there is a lot less insight into what goes on there. However, I'm fairly sure that the CEO did sell some of his shares during one or more financing rounds, in order to create a little nest egg for himself.

On top of that I'd imagine that during the 8 years or so, he probably took out at least 200k EUR in salary, if not more, per year. So a few millions of dollars probably went to the CEO.

Correct, but none of this is a “bonus”, as claimed in the parent comment.

The bonus I mentioned was all over the news in Sweden last night. No, it was not paid yet, but looks like there's little chance that will be stopped.

Edit: example news from a few hours ago: https://www.svt.se/nyheter/lokalt/vasterbotten/northvoltarbe...

It's unclear if the employees receiving that are actually top management, but honestly, I would be surprised if they're not, as they are the ones who always get this sort of bonuses.

EDIT 2: you don't need to speak Swedish to understand what North Volt itself wrote is about a bonus program, so yes, it most definitely is a bonus: "bonusprogrammet är avgörande för att upprätthålla arbetsmoral, motivation och lojalitet"

I live in Sweden. Can you share a link? I bet that what you have in mind is the bonus that could be paid to about 230 employees, explicitly excluding the top management, in order to retain them. Or perhaps the news that the former CEO has sold some shares during a founding round, which is a relatively standard practice and not a “bonus”, and a way to keep the CEO salary reasonably low.

Edit (following your edit): You wrote earlier: “including paying millions of dollars in bonus to their incompetent executives”. The link you shared directly contradicts this since it mentions the equivalent of 6M USD distributed to about 230 employees. Another article mentions very explicitly that top management is excluded. According to these articles, it is simply impossible to conclude that top executives will receive “millions of dollars”. You’re just contributing to rumors that are not based on facts.

In my view, you're the one spreading lies here. I haven't seen anywhere that top management is excluded. Please link to sources if you have reliable ones. About the bonus being spread over 230 employees: no one can know how much will go to each employee. From my experience with shenanigans like this, usually two guys will each get 40% of the whole bonus, and the other 228 will get the remaining 20%. Do you have actual data on that or you're just interpreting this in the most charitable possible way you can???

I'm only repeating what I read on SVT website (Swedish national public television): https://www.svt.se/nyheter/inrikes/northvolt-vill-betala-ut-.... All your points are addressed in the article.

Northvolt's leadership seem extremely incompetent, reading the news here in Sweden the CEO has been lambasted by former employees on how bad he was for executing the plan.

But this happens all the time in the USA, it's quite funny to read comments on HN about how Europe is losing to USA's "innovation" but when one company does follow the USA model (huge injection of capital, unreliable/inexperienced leadership, failure to execute/pivot) then it's an apocalyptic sign. It's risky, and in this case it failed spectacularly.

If they had pivoted to Blockchain in 2017 and then to foundational LLM models in 2022 they would have been fine - its typical European lack of exceptionalism (/s?)

Because a startup scene needs a fucking scene. Having exactly one darling company in each sector is recipe for the classic yet seemingly every time unavoidable "too precious to fail" failure mode.

It's the same thing that always happens in Europe when we're trying to mimic something from the other side of the pond, we do it too late, too small, too fancy.

Here's a nice, detailed, insightful essay (?) on the Canadian tech scene, but of course blindly replacing Toronto with Berlin (or at least the CN tower with the Fernsehturm) and the results are the same.

https://alexdanco.com/2021/01/11/why-the-canadian-tech-scene...

We have an epidemic of bad leadership. It's everywhere. Governments, research institutions, private and public companies. I don't know the cause of it, but from what I observe from my workplace it's because the heavily bureaucratic processes of both public and private entities requires a certain personality that is basically a politician above all else. And the whole promotion process is a one way valve. Once you go up a rung there's very little you can do to be pushed down the same rung again.

The best managers I had are people who made their career in the US and returned to Europe as senior managers.

One the advantages of capitalist competition is companies run by bad managers go bust and the resources can be redeployed. You get rid of that and have promotion based on office politics and you get a lot of problems.

There is also this Czech failed battery startup "HE3DA". It went from revolutionary to evolutionary to "well, there is at least one parameter (robustness) that's better than lithium batteries" to "hmm the measurements don't quite match the specs". There were individual investors, big show for opening a factory (with capacity of 1.4GWH we were told; actual batteries sold in 2024: single digit MWhs). Now they fired almost everyone and can't pay their bills

https://www.e15.cz/byznys/prumysl-a-energetika/pravda-o-bate...

Seems like Northvolt never really had a product. Can someone please explain why people invest billions in companies that have not sorted out how to build what they want to sell?

Battery cell production alone is massively expensive. The expenses in setting up a production line is counted in the billions.

So the only way to start fresh here is to raise billions in capital. Unless you're Volkswagen or something, when you could invest billions in an enterprise like this one.

Volkswagen has their own plans with its subsidary PowerCo, and since EV adoption is slower than expected, they may (partly) drop Northvolt in favor of PowerCo. Interestingly they canceled their plan for a second battery plant in Germany due to high energy costs.

Regarding Germany: I still do not understand how you want to electrify everything, reduce CO2 emissions, and then shut down fully working nuclear power plants in the middle of an energy supply crisis. This is completely beyond me. I know there are people defending this decision, but I can only attribute this to malice or idiocy.

> I still do not understand...

Renewables? + some batteries + gas peaker as winter backup

The nuclear plants weren't fully working anymore but taken into planned shutdown 10 years after the decision was made to shut them down. That people think Nuclear is a power technology where you can just nilly-willy decide to continue running is the real idiocy.

Energy prices are now lower than before the run-up to the Russian war of aggression.

The decision to fade out nuclear power was made under the assumption of having an alternative reliable energy source (namely Russian gas). If your main assumption suddenly blows up (literally), do you really claim that stubbornly sticking to your original plan is the right way to go?

I'm always amazed when I am reminded that there is still a pipeline through Ukraine moving Russian gas to Europe.

What if they didn't stubbornly stick to a plan but instead considered all the alternatives and refurbishing a nearly run down nuclear plant wasn't the best option?

> The government commissioned a so-called “stress test” in the summer of 2022 to see whether it would make sense to let the remaining reactors run several months longer to ensure grid stability during the winter of 2022/23. It found that a limited runtime extension could make sense for supporting electricity production. Chancellor Olaf Scholz ultimately decided that the three remaining nuclear plants in the country receive a runtime extension of about three months, until 15 April 2023, to act as a backup during the crisis. The government later ruled out any further extensions and plant operators said that letting the plants run longer would not be possible from a technical point of view, even if this was desired politically.

https://www.cleanenergywire.org/news/qa-why-germany-phasing-...

By the time Putin started his war there were only 3 reactors left. Their run-time were extended for 3 1/2 months which apparently conserved roughly 2% of annual German gas consumption.

https://de.wikipedia.org/wiki/Atomausstieg#Seit_2022:_Diskus...

The reality is that a majority of Germans don't want Nuclear power. Seeing how little other countries in the west are building it seems that sentiment is pretty common.

You are absolutely right, that Russia required us (and many others) to rethink many assumptions. The German answer was to build out LNG terminals and double down on renewables.

> shut down fully working nuclear power plants in the middle of an energy supply crisis

Yes it is a stupid decision, but your timeline is out a little - 2011 is when they decided to shut down the power plants, the energy crisis was 2022. The amount of work that doesnt get done when you are 2/3/4 years from end of life makes reversing the decision on the day of shutdown not as easy on the ground as it is from an armchair.

In a crisis you sometimes have to go the non-easy way. They built terminals for fracking gas in record time, so I am sure they could have found a way to keep those nuclear power plants running for a few more years.

“I am sure” of many things I have no idea about, too. It’s called Dunning Kruger effect.

> I know there are people defending this decision, but I can only attribute this to malice or idiocy.

Import energy from abroad, you get to claim that you're all so Clean and Ecological[0], while all you've done is shift the dirty coal plants to some other countries that don't care and will happily take all the blame in the global statistics, as long as you keep paying them.

See also: manufacturing, another case where western nations outsource the dirty and energy-intensive parts, import finished products, and get lauded for "reducing" their footprints.

Accounting trickery, is all.

[0] - A claim that's belied by opposition to nuclear energy alone.

I attribute it to idiocy, but not on the part of Germany today. Sibling comments have already pointed out that a shutdown of nuclear was already decided in 2011 and that you can't just reverse that decision on a whim. I want to add that the shutdown is a culmination of over 60 years of lobbying, first by the Green Party when they were still single-issue radicals in parliament, then by environmental groups like Greenpeace. I like to believe that their intentions have always been good and noble, but to prioritize nuclear over the real polluter (fossil fuels) has always struck me as idiotic. It didn't help that the media constantly painted the search for a final resting place for nuclear waste as an insurmountable crisis, and of course Fukushima basically did the rest.

>you can't just reverse that decision on a whim.

You definitely can when your own existence/security is under threat.

In such cases, you can override people's idealist wishes since keeping borders defended and citizens safe, fed and warm in trouble times is more important to maintaining a stable economy and society long term, than rolling with the idealist fantasies of not using nuclear energy that people wished for when times were good.

But 30 years of not taking military/defense and energy self sufficiency seriously, is costing the EU taxpayer greatly now. It's a tragedy of the commons.

Grifters and con artists are skilled in the ways of grifting and cons.

Note "Britishvolt" suffered the same fate 12-18 months earlier and the story reads pretty much the same.

The name "Britishvolt" alone should be sufficient to raise all red flags.

And blue and white.

The government loved the name and flew that flag high.

So what is the learning here, why did it fail? From the timeline it looks like it spread out too much and didn‘t create a great product first.

It says in the article, they expanded too fast and i agree. Your other point also seems to hold.

I think i read that they could not deliver the quality and quantity expected for automobile production. Bad product, overextension and I won’t be surprised if some graft will show up once they start digging. Norway has another such venture where the executive suite pays themselves handily and delivered nothing.

Northvolt also counted on cheap materials from Russia, e.g. infamously environment unfriendly nickel from Norilsk, which clearly didn't pan out after the 2022 invasion of Ukraine.

Nothing to learn here, they were just scamming various governments.

That's why they promised to expand to so many places, each government subsidized them separately.

Expanding to multiple EU states is a requirement to satisfy the various governments if you are getting public EU funding. See Airbus for an example.

The difference is that Airbus didn't as much build new factories (and certainly not several at the same time) as it is a consortium (and later a unified company) of formerly independent European aerospace companies. E. g. their current German plants, Hamburg (commercial aircraft) and Donauwörth (helicopters) used to belong to MBB (https://en.wikipedia.org/wiki/Messerschmitt-B%C3%B6lkow-Bloh...) and then DASA (https://en.wikipedia.org/wiki/DASA). That's a consolidation similar to what happened in the US, albeit maybe with more "state interference".

I read something once about the question of Airbus and Boeing subsidies. The short answer was “It’s complicated.”

Of course, that particular question seems to have been rendered irrelevant by Boeing’s quality crisis.

And also kinda required from an economies-of-scale point of view. The US is spoilt by havbing a massive, culturally-and-language homogenous country. Despite their wealth, If you want to hit those scales in Europe you need many countries on your customer list. And since each country (usually) has it's own language, laws, norms, sometimes currency, it gets way complicated, way fast.

This is somewhat true, but I don’t think it is necessarily fair to them. Their strategy was to try to do everything themselves (except raw material mining). By having vertical integration across the battery space, they would be able to hopefully compete on price with the battery giants in China like CATL, while still working out of Europe, which is a lot more expensive in terms of labor costs, and regulation, and everything else. But they didn’t get that far and their biggest customers like BMW started abandoning them while waiting for deliveries to begin. This began the doom spiral. But it is possible that with more money and time this would’ve been the right strategy for the long term competitiveness of the company. Otherwise, if it’s going to be permanently uncompetitive what’s the point? Maybe this was indeed, some kind of scam for government subsidies. But I think it’s more about the difficulty of finding funding to do big things, and to do them properly.

Doing anything in the EU is hard, and since CABM is not even live yet it was unnecessarily extra-hard.

And then it seems they were completely incompetent. (Custom middling quality machines ordered from Asia, they then weren't able to scale up the process and/or quality.)

Of course, if it had worked it would have made a lot of money to a lot of people.

https://taxation-customs.ec.europa.eu/carbon-border-adjustme...

Comments from insiders in Swedish[1] and Dutch[2]. Some snippets:

... In the end, they are just in a situation that is almost impossible to save. You have a factory full of machines that are substandard in quality, reliability and documentation. A huge 100% in-house tech stack that largely consists of Go pieces on Lambdas writing to DynamoDB. ...

... A gigantic factory full of mediocre Chinese equipment, what can you do with that? They are not standard things, they are things custom made for Northvolt but unfortunately with incomplete specifications. ...

...The whole market is not doing well in Europe. We don't really have the raw materials here (Northvolt's came mostly from China), we don't have the knowledge (that's in Asia) and we don't have the machinery for production. ...

[1] https://old-reddit-com.translate.goog/r/sweden/comments/1g1x...

[2] https://tweakers-net.translate.goog/nieuws/228816/faillissem...

Pfft. Sure blame the Chinese equipment and not the corrupt and incompetent European management. The Chinese manage to produce batteries just fine.

Main equipment manufacture was Wuxi Lead, where naturally everyone speaks almost exclusively Chinese and all docs are in Chinese. Not a problem of course when most customers are also Chinese, much more so when they're European.

If you are spending billions, surely you can bring in some people that speak both Chinese and the local language. Heck, there are even real-time translation services now. No, the problem is not technical, it's that it was a scam from the get go.

The goal of a scam is to make the scammer richer. Who gets richer in this case? No one. So that’s not a scam. I’m disappointed seeing that kind of accusations stated without evidences on HN, a forum about entrepreneurship and tech, where we used to celebrate success as much as learn from failure.

The money from investors went somewhere, there are people that got richer...

Most of the money went into the pocket of extraordinary dedicated employees who were paid market salaries (actually often slightly below market), and suppliers as well.

He also mentioned they didn't specify certain details when ordering, leaving the Chinese to make choices, and that caused issues they had trouble with once delivered.

This might be a culture thing. At least next door here in Norway, a decent supplier will definitely ask when needed, offer suggestions and even resist if you try to order something stupid.

Having a supplier/disti work with you to get the best deal doesn't happen very often. Mostly due to the fact that they could leave money on the table. If you order something with the wrong configuration they can always sell you another thing with the right configuration...

There is also a possibility of cultural differences and who knows what the Chinese thought the Europeans wanted when they did not send complete specs for the equipment. In some countries it is not customary to challenge the client - but I do not know if it applies to China as well.

I've seen how they build stuff in China, and most likely Nothvolt thought it could do some things on their own without understanding what those things would entail. Maybe if they would have asked the supplier to come in and setup the factory and also run the first batches of finished batteries the situation would have been different.

Somehow I think now they're trying to find a scapegoat for the whole debacle and blame on the usual suspects.

To be fair, the referenced comment (in Dutch) blames management:

> Helaas is het probleem bij Northvolt echt gewoon te herleiden naar slecht management (ex-Tesla), en bijgevolg een slechte keuze van leverancier van productiemachines (Wuxi Lead).

> A huge 100% in-house tech stack that largely consists of Go pieces on Lambdas writing to DynamoDB

Oh, well, that explains everything! Great insight... /s

The tech stack was a weird quote. This is significant:

> In theory it's microservices, but the reality is that there are so many circular dependencies that it works like a monolith

But lambda/go/dynamodb does not force this situation.

True, but it doesn't mean you can code it to be in this situation.

If all your life you coded monoliths, you can code monoliths using Lambda functions too, there's nothing magic that will stop you from doing it.

You can’t outsource something for decades then think throwing money at something will be enough to pick it up yourself on a tight timeline.

Nor be surprised if your interests don’t align with a chineese actor you’re trying to replace.

I found a post supposedly written by a Chinese supplier of Northvolt. Not sure how true it is though so you will have to find some insiders to validate the story. You will need some software to translate the picture into English/other languages.

https://imgur.com/AyQYtFj

That there is no focus the actual failure, and that is a secondary failure,ongoing. Engineering, production, know what a millwright is? The bros thought they could bluff there way through a parts per billion production line,and just hire people,strut around and go to meetings.Anylise things. Better batteries are made from materials that are known and consistant to parts per billion.The mechanical assembly has to be within microns.Every parameter of temperature and humidity must be known and controlled at every stage. It is a long tradition in some shops, that when the brozecutives show up, they are taken to the maitenence department and allowed to chat with the janitor, but never see the actual shop floor, and never know the difference. Look at boeing to see what happens when the bros think they can optimise, purely engineering descisions, that are already finely tuned. Want to build an engineering company?

Also discussed here[1] a few days ago.

[1]: https://news.ycombinator.com/item?id=42210855 Sweden's Northvolt files for bankruptcy, in blow to Europe's EV ambitions

It was also reported that Northvolt now wants to pay 59 MSEK in bonuses to 230 employees. Despite firing over 1200 people and with 2.5 BSEK debts to suppliers.

I also heard this was partly to do with demand moving towards LiFePo4 batteries and their setup being completely unprepared for that.

The promise that needed 1 billion in subsidies to build a new plant? As soon as the government got involved it was clear they couldn't be profitable on their own.

Tesla got a ton of government subsidies, but is successful, there is no causal relation between the two things.

Tesla is still getting tons of subsidies, directly and indirectly. We'll see if they are successful once that stops.

So does the whole car industry. Directly or indirectly.

The industry as a whole is nowhere near paying for its true health and environmental damage.

Tesla I think proved it was competent at making stuff before getting much subsidy. Northvolt seems to have got it up from without much battery making.

Have you seen China? Northvolts demise is completely orthogonal to the concept of subsidies.

I'm curious how China makes it work. No doubt they also have dedicated, smart and educated people - I guess no massive shortage of that in Europe either. Central government is often considered to be somewhat corrupt and incompetent, so in any case not hugely better than in Europe. I'm sure there's more know-how, but that came from somewhere too.

What is the difference then? Willingness to work for lower wages? Greater determination? State subsidies? It's not like Chinese universities have a great reputation en masse. It's also clearly not IP theft (alone) since they are the leader - who would they steal from?

If it's subsidies, then China must be taking the subsidy money from somewhere. It's not, as I understand, a non-social, cutthroat capitalist country. Retirement age is something like 55. Is Chinese hegemony in battery production effectively subsidised by underpaid peasants? But surely the image of guys in sloping hats rolling rice paddies desperately outdated; I don't expect Chinese farming to be behind European in terms of technology.

So if it's subsidies, then where is the money coming from, that European governments clearly don't have?

Yep. Europe is socialist, which makes it extremelt difficult to start successful tech-companies. Europes unicorns is far fewer than what are created in the US and China.

As long as europe continues to heavily regulate and tax its citizens in the best socialist tradition, it will continue its decline, to become a tourist playground in a generation or two, for the rest of the world.

I always advice young entrepreneurs to move outside europe to start their companies.

In its current form, europe is dead.

It's a lot better place to live than the US though. And we don't need as much. Quality of life is not measured in terms of the amount of stuff you can buy. We don't have to be afraid of getting shot at school or being bankrupted because of an illness. We don't have to pay off our student loans for decades. Income equality is much higher (leading to more public safety and fairness). To many of us this matters more than money.

The US has different goals than we do. Europe has never been about maximum profit. Capitalism is a tool to support society, not the end goal.

entrepreneurs suck anyway.

In China people might retire at 55 but there's no government pensions. People's children are their pension. Social welfare is not very great there.

China had a big push to promote engineering a few decades ago. A recent quote "China is the world's top producer of engineering graduates, producing around 1.4–1.5 million graduates annually, which is about one-third of the world's total." They also took over as the world's workshop making a lot of our stuff.

There was a lot of competition making things like batteries and if you look at the CEOs of the biggest battery producers there, CATL and BYD they are both very technical and near genius level. Making good batteries is probably quite hard.

That's a very good point.

Germany was always brilliant at mechanical engineering, their universities are decent in general, but very good at all forms of mechanical/chemical engineering.

US is mad keen on software and entrepreneurship and its top universities churn out software startup founders like nowhere else. It's just a pity software ain't what it was 10 years ago.

Perhaps the deep cadres of really well educated engineers, and thus available work force, is the determining factor here.

Sounds like a good balance - Europe does science, US entrepreneurs, China manufacturing.

Ha, well, it feels increasingly like China is eating everyone's lunch.

Fair play to them, that's only what the West had done for the past, hmm, 300 years? But of course a bit bleak for European and US GDP.

Another Better Battery Bulletin followup

Europe is entering a crisis of unprecedented proportions. This isn't just an isolated incident, one bad company, this is a trend. It used to be that subsidies managed to balance out the over-regulation, high labor costs and powerful pressure groups Europe was known for. Now it's no longer the case.

There used to be a technological edge European countries (especially in the west) could rely on, which made them more suitable for some business. But now it's gone, almost everywhere. Exception is couple of important, but niche industries, which are seen as being of strategic interest (Airbus, ASML, Arianne). But they too feel the pinch now, as the supply chains get more fragile, new talent leaves, or doesn't even show up, and foreign powers prop up their own alternatives.

Add incapable, or shortsighted, political leadership, aging population, hostile, or at least unfriendly, neighbors and rising political extremism, and you get a particularly deadly mix.

Unfortunately, the top institutions have shown almost zero acceptance of the fact. In that sort of situation the only "hope" is that the collapse will be relatively quick, allowing for some rebuilding to start before the next decade ends. If we are lucky.

If Europe as major part of the West continues to fail this is going to happen

- Russian influence will rise and dominate at least major parts of Eastern Europe

- China will expand its footprint in Africa and increase its ambition in Asia

- US and Japan will become more isolated than ever

Nothing is going to stop China's rise but China's own failings (mostly demographically).

Russia can't even beat a country one third its own size despite petrol dollars and legacy military stock.

I agree. But Russia is being backed by its Asian allies. They will grind forward albeit slowly.

Russia does not need to win to still wreak havoc.

Their hybrid warfare has created massive social rifts and political instability across all major Western Democracies.

Unfortunately you do not need a lot of money to do evil, when the devil's whispers are enough to turn citizens of a nation against each other.

A great lesson in asymmetrical warfare.

"Their hybrid warfare has created massive social rifts" - Really? Do tell. I haven't noticed anything like that. Nor political instability.

Yes. That is very much given. In fact some of it has already happened.

Europe has effectively ceded it's position in Africa to others some time ago.

Aid based approach has led to little tangible benefit for locals, and even less for Europeans. Furthermore, conditions the recipient needed to fulfill were, and still are, often hard to accept for cultural and historical reasons. Add to it the lack of actual power projection and all you have is contempt.

It's pretty visible during any UN vote.

Simply put, investment beats aid, every single time.

The silver lining is that Russia is having it's own issues, not entirely different but similarly horrible. Namely demographic crisis, exacerbated by war and poor public health. There is also demographic crisis in China, however their government has been wise enough to not go to all out war.

>Russian influence will rise and dominate at least major parts of Eastern Europe

Definitely not, given how russophobic Eastern Europe is. They had enough of Russia to last them several lifetimes of misery.

On the other hand, Western Europe, especially "neutral" Austria is a lot more pro-Russian than the East.

Being russophobic doesn’t mean you’re safe. See Ukraine.

Russia can't go past Ukraine

Sadly but true. The latest issue is that the EC would rather see the auto industry fail than to change its climate objectives. It looks like it gotten so bad that Germany started speaking up against emissions goals and most likely would try to block any measures.

I don't think Arianne is successful as it relies on traditional technology to launch things into space and they can't be competitive with SpaceX.

The EU is the laughing stock of the world: AI regulation is in force, but no single AI company in Europe :)) - just to name one example.

Mistral is french

True, and in my opinion a proof that Europe has potential to recover. Unfortunately it remains to be seen if they manage to survive oncoming regulator onslaught.

I hope they will.

The way the current EC is set, fat chance of giving up regulating everything they can regulate.

Flux (the image generator of xAI) is by Black Forest Labs - a german AI company for example.

Nice. How much money is it making?

How is AI regulation a laughing stock in the context of emissions reduction?

America innovates, Europe regulates and China copies.

It was a parallel that in the EU we have regulations for things that there are no successful companies in the field and even if some companies will do AI in Europe, they will not be able to compete globally because they are chained by regulations. And with regulations that do not into account the economic realities, like the slow killing of the auto industry with the push for EVs even if very few people actually want them.

As an EU citizen I really applaud the AI regulation. And I work on implementing AI too.

If we look at how the big social media experiment panned out, polarising society through engagement-driven algorithms, it was important to prevent this happening with AI. The same with adtech which caused too much surveillance.

Because it's much harder to put the genie back in the bottle when companies are already heavily relying on it for their business model. We try to steer the industry towards business models that benefit society as well.

AI is nice but it's important to make sure it doesn't undermine society as social media certainly has done. And the regulation is not outrageous. It's mostly common sense.

I'm also an EU citizen and I very much like to see SkyNet happen.

Joke aside, these regulations, however "common sense" they look like, it will make the EU lag behind every other country when the genie comes out of the bottle. So instead of being at the forefront of AI, or close, the EU will be in the last place.

Those climate objectives are necessary. Soon we will be spending a lot more on disaster mitigation than we would have on some EV subsidies. If anything the transition is not fast enough. I'm living very close to Valencia with its recent flooding disaster, that it didn't happen here was just a matter of chance. That week alone has cost the country more than 10 billion in damage payments and the actual damage is a lot bigger than that. And that's not even considering the hundreds that were killed.

And cars aren't as important here as in the US. I haven't owned or driven one in 7 years.

I agree that ariane isn't doing well but it's really niche anyway.

>Those climate objectives are necessary.

They're worthless if the rest of the world is not on board with you.

If you're the only one on board, all you're doing is making your domestic industry uncompetitive and your working class citizens poorer via high energy prices, while the largest polluting nations are destroying the planet further while also getting richer thanks to not giving a crap about the environment and eating away your share of world GDP.

What EU is doing is like trying to loose weight by cutting your own legs off calling it a good policy.

> They're worthless if the rest of the world is not on board with you.

Not really. The EU is one of the biggest contributors to climate change. Our change will help. And the rest will have to follow eventually because they are also affected. And they will be in a bigger hurry and it will cost more.

> If you're the only one on board, all you're doing is making your domestic industry uncompetitive and your working class citizens poorer via high energy prices, while the largest polluting nations are destroying the planet further while also getting richer thanks to not giving a crap about the environment and eating away your share of world GDP.

Also, it's not a race we have to win. Life is not about becoming the richest.

>Also, it's not a race we have to win. Life is not about becoming the richest.

It is, if you want to maintain the generous welfare and high standard of living the EU is used to. Where do you think that money comes from, the sky? It comes from having a world dominant economy. Without that, there's no more money for good wages, pensions and welfare and the people won't be happy with that.

Otherwise, the EU citizens will either have to be contempt to being poorer, OR, more likely, they'll vote another Austrian painter to power to upset the apple cart.

We don't need to get even richer is what I mean. It's fine.

I even moved to a lower wage country within the EU (about half as much as I would be able to make at home) to get a better quality of life. There's enough flex, we are still one of the richest regions in the world.

Also, a lot of costs scale with income anyway.

Sounds interesting. Which country did you move to?

I'm in Spain now.

Better quality of life compared to where? Most young Spanish workers I know emigrate out for jobs.

Being from the country with probably the worst pension system (and a government that is doubling down on it) with year on year deficit, and generational wealth gap, it's rich saying "we don't need to get richer".

They can prepare better for natural disasters. And while climate change is an issue, we have the technology to fight it and not bankrupting entire industries to achieve some far fetched green goals.

You might not like cars, but a lot of other people do.

These goals aren't far-fetched though. We're really far behind the curve as humanity. We need to do this sooner rather than later.

Don't forget there is a huge latency in CO2 emissions and their effect. The CO2 we're saving now will only take effect in 20 year's time. The next 20 years of increasingly worst disasters are already locked in. In 20 years doing what we should do now will feel easy.

I know the US will probably pull out of the climate accords again now that trump will be president but that's no reason for the rest of the world to do nothing. Even China is making lots of headway.

But it also means we can't really keep living as we are. People really need to switch to EVs if they want to have a car. Also sooner rather than later. But here in the cities in Europe we're seeing less people owning cars and more and more excellent public transport. Which is even better, you can use it after drinking, you don't have to pick it up from the place you left it off, you can read a book while using it, there's no maintenance or insurance. It helps climate and it's an easier mode to travel.

You do know how much CO2 is expended to make batteries, no? The fact that is not done in Europe doesn't make it less bad. Those mining machines don't run on water, you know, they run on tons and tons of diesel.

> The latest issue is that the EC would rather see the auto industry fail than to change its climate objectives.

I don't think climate objectives are the problem. The auto industry wants to see them reduced because they want to keep pumping out diesel engine cars, i.e., making us buy obsolete technology while tariffs prevent us from buying cheaper and better foreign EVs. Do you really think that's the path to keeping our auto industry in the long term?

If climate objectives were more ambitious and weren't being pushed forward all the time due to industry lobbying, we would probably see more innovation in Europe.

If diesel is bad, why not just say "make gas powered cars and hybrids only, no more diesel for consumer cars under 3.5T or 7T"? Seems easier than the current agenda.

> AI regulation is in force, but no single AI company in Europe

DeepMind (UK)? Mistral AI (France)? ElevenLabs (UK)? Stability AI (UK)?

NV bought manufacturing equipment for $2B from China, now left in the lurch during bring-up, supplier dragging their heels, sending 3rd rate support engineers. Of course, China doesn't want to support a competitor in Europe...

Classic rogue state hybrid warfare, just as cut cables in baltic, also by Chinese. Plausible deniability all the way.

https://www.newsweek.com/baltic-cable-sabotage-nato-1988689

This is what I’m seeing in social media elsewhere - reports of difficulty getting good support from Chinese suppliers.

Support is expensive getting good support from China is generally not possible, because it destroys margins. That is making me very curious about aftermarket of Chinese cars, because they might be cheapish today, but incredibly expensive when you will need to fix them.

I found a post supposedly written by a Chinese supplier of Northvolt. Not sure how true it is though so you need to find some insiders to validate the story. You will need some software to translate the picture into English/other languages.

https://imgur.com/AyQYtFj

So you made a bunch of claims and then linked an unrelated article?

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