In November 2024, Northvolt — once considered Europe's most promising battery startup — filed for bankruptcy, and CEO Peter Carlsson stepped down. The collapse followed roughly $15 billion raised from top-tier backers including Goldman Sachs, BlackRock, and Volkswagen, along with more than $50 billion in orders from major automakers like VW, BMW, and Scania, and a record-setting $5 billion green loan led by JPMorgan earlier in the year. For a time, Northvolt stood as a symbol of Europe's ambitions in the battery sector.
A Due Diligence Process That Missed the Warning Signs
What makes Northvolt's failure so instructive isn't just its scale — it's that so many sophisticated investors and automotive partners, all experienced in rigorous diligence, missed or discounted serious underlying technical problems. The explanation may be structural: technical due diligence at most institutions simply isn't held to the same standard as financial, legal, or commercial diligence.
Traditional diligence tends to front-load its scrutiny into the initial investment decision — a snapshot of finances, sales, IP, technology, and people at one moment in time. Financial performance gets tracked continuously after the check is written; technical health rarely does. That asymmetry lets serious operational and production issues fester quietly, invisible to the people who could intervene.
Why Technology Needs the Same Ongoing Scrutiny as Financials
Had Northvolt's investors and board maintained a program of continuous technical review — regularly examining engineering leadership, platform architecture, operational metrics, and production readiness — the underlying weaknesses likely would have surfaced early enough to act on. Instead, technical oversight seems to have been treated as a one-time diligence checkbox rather than an ongoing governance discipline.
Part of the problem is representation: most boards still lack directors with real technology depth, in the same way boards once lacked financial expertise before audit committees and financial subject-matter experts became standard practice. It's unreasonable to expect a typical board member to evaluate system architecture or engineering metrics unaided. Boards need to build in access to independent, outside technical expertise the same way they long ago built in financial audit rigor.
Technology Execution Isn't Static
Deep-tech ventures like Northvolt operate in fast-moving technical domains where yesterday's assessment can be stale within months. Corporate governance has historically leaned hard on financial metrics while giving technical execution comparatively little structured attention — and Northvolt, despite multiple funding rounds and blue-chip investors, appears to have had exactly that blind spot.
By contrast, companies like Amazon, Apple, Google, and Microsoft subject major technical initiatives to frequent, detailed internal review as a matter of course. Applying that same discipline to Northvolt likely would have exposed unrealistic production targets and execution gaps early enough for the board and investors to intervene before the losses compounded.
A Governance Model Built for Technology-Dependent Businesses
The lesson extends well beyond deep-tech and battery startups. Nearly every growing enterprise today is, in some material way, also a technology business — dependent on software, technical leadership, and secure, well-run operations. Independent technical audits deserve the same routine status as financial audits, and technical milestones deserve the same weight in board decision-making as revenue targets. Talent quality, team cohesion, and technical red flags all belong in that evaluation.
Northvolt's collapse is a warning about a structural gap between financial and technical governance — a gap that will only matter more as more companies become dependent on world-class technology execution to survive. Continuous technical due diligence isn't a nice-to-have anymore; it's a required safeguard against exactly this kind of catastrophic, avoidable loss.
Anthony Bay is CEO and co-founder at Techquity. www.techquity.ai He has previously held senior roles at Amazon, Apple, and Microsoft as well as early-stage companies, served on multiple private and public boards, and launched the world's first social network before the Internet even existed. He has led product groups, M&A, CEO, and board governance for everything from early-stage startups to large corporations.