Every government in the world loves to encourage value added enterprises to enhance the economy. All countries have something that allows for people to maintain a livelihood, the next step is some sort of manufacturing process and people in general can move from subsistence to middle income living. That is a good thing and governments around the world encourage it with incentives. Often a company says we agree with the government and launches an ability to match the government incentive.

In an article from Reuters, governments around the world have recognized the weather is changing and something needs to be done to change the forecasts. Many governments have encouraged electric vehicles which use less fossil fuels, one of the governments which agreed was Sweden.

In Sweden there is a company called Northvolt Group which is in the battery business and they agreed with the government. The production of batteries was a natural extension for the company and they set up the Northvolt Expansion AB unit to build batteries at its gigafactory in northern Sweden. The company raised money from VW, Goldman Sachs and BlackRock and all was good until it was not.

The company said the Northvolt Expansion AB has filed for bankruptcy owing between $264 to $396 million dollars or between 2 and 3 billion Swedish krona.

Europe was disappointed as Northvolt Expansion AB was Europe’s best shot at a homegrown electric-vehicle battery champion. The company cited production problems, sluggish demand and competition from China.

Linking to dividend paying stocks, sometimes the most profitable companies because they are profitable have a connection to governments and the government suggests they should expand and do what the government would like. Government subsidies and encouragement are offered and accepted to lower the risk to the company, but the wonderful supply and demand charts of introduction to economics still apply. No demand, company loses money. Just because they are homegrown, does anyone want to pay more? Moving into markets with government assistance can be worthwhile it can also be expensive to shareholders.

There are more questions than answers, till the next time – to raising questions.