According to this (and other) reports, they never got their high volume production yields anywhere near that of their (Chinese, Japanese, Korean) competitors, which made their end products far too expensive. Geopolitics aside, they didn't have any competitive edge, it's difficult to see where they would get it, since both their raw materials and manufacturing equipment were majorly imported from Asia.
Nothing attracts skilled labor better than perspective of paying 45% monthly contributions then begging the housing market to accept you, so you can pay another 40% of net salary on rent.
>Rent? The town does rent control. There is nothing to rent. You can't outprice the locals with their queue time.
IMHO, this is one of the biggest issues holding back EU labor mobility in places with strongly regulated rent controls. You're an EU citizen and wanna move somewhere else for a job but you get fucked on the housing market because the locals have privileges you don't have, so either employers need to take a hit and compresate foreign workers more for the trouble, or they don't and so you either get fucked if you choose to move to work there, or you don't bother moving at all because it's a shit deal so the employers are starved of labor and go bust. And that's besides the legal, linguistic and cultural hurdles you have when moving to a new country where you don't know the system and don't speak the language.
The EU fixed a similar issue like this when universities gave special privileges and conditions to local students but not to students coming from other EU countries who were being charged money for things the locals got for free, so the EU forced them to have to give the same benefits and treatments the local students were getting to all EU students coming to study there, ending this discrimination.
IMHO, the same needs to be done on the housing side if we wish to have actual labor mobility that improves the block's economic potential, and not just one that's on paper and holds back economic development by wanting to screw foreign workers of more money to prop up the local housing bubble.
If a skilled EU citizen moving to another EU country for work, the new host country is already getting a huge break for getting a new taxpayer paying into the welfare system out of the box for free, without having invested 20+ into their education like it did for the locals, so then why double dip and also screw them over with unfavorable housing rules that only serve to enrich landlords?
This is one of the reasons that pretty much all academic economists, regardless of political affiliation, agree that rent control is bad policy.
The economically superior way to help locals of lower means is through income transfers (because it fucks up the market way less), but the politically superior way is via price controls (because you hide the tax-transfer redistribution and can pretend that you're just sticking it to fat-cat landlords/corporations/investors).
Exactly. The only solution to affordable housing is to build more. And if you run out of space to build more because the city is full and don't want to ruin the character with skyscrapers, then you need to invest in infrastructure and facilities in the smaller cities that are not yet full and attract employers and workers there. Artificially capping prices on life necessities such as housing is never a sustainable solution.
You could argue that from the point of view of the county's social democrat and socialist city council, that the rent control have worked as intended, in that the locals where not displaced to the same extent that a rent boom would result in.
I think they argue that Northvolt could have funded enough housing if they wanted. But they seemed to mainly have housed workers in barracks. I think 1000-2000 something lived in barracks.
>You could argue that from the point of view of the county's social democrat and socialist city council, that the rent control have worked as intended, in that the locals where not displaced to the same extent that a rent boom would result in.
Sure, this aids the locals on the short term and is politically popular, but I fear this kind of local protectionism and NIMBYism will further nerf the EU economically on the long term on the global stage (EU economy is now half the size of the US one, when 20 years ago we were on par).
I'm thinking on SF and the Bay Area. The tech boom there caused a lot of gentrification and displacement which was bad for some of the locals, but the tech industry there was still a massive net benefit to the US economy in the grand scheme of things.
So I don't think rent control and price brakes for the locals is the right solution. IMHO you should let the free market run its course and have government programs in place to assist people who can't keep up economically so they can realocate to more affordable areas and invest in those areas with infrastructure to make them desirable to live and attract future jobs.
The total contributions from monthly paycheck are brutal enough in most EU countries. The rent seeking on real estate chocked the intra-EU mobility to death. No one is relocating, forget about it.
>The rent seeking on real estate chocked the intra-EU mobility to death.
Thanks, you put it more concise than me. And this is also a huge issue with ageing population and growing welfare costs. You'd think they'd want to encourage people to move to where the new jobs are being created in order to get the economy moving and taxes flowing into the welfare state.
If the EU wants to act like a dragon sitting on top of its gold pile, and the economy to be a bunch of ageing people holding onto their rent controlled apartments hoping to see the same welfare and retirement benefits while the economy slows down due to crazy costs on real estate and doing business, this won't end well.
Most EU innovation happens in universities anyway. Private companies doing innovations around consumer facing products and services is something mostly the US excels at, not Europe (exception maybe Sweden).
Products like the first iPhone didn't have any innovative technologies in them created by Apple, they were built from commercially available off the shelf parts every other phone maker had access to. But the product as a whole package was still highly innovative and profitable. This is the kind of product innovation that's gone missing in Europe.
Stuff like the MP3 codec was an European invention at the Fraunhofer Institute, but it's not a product bringing in trillions in revenue for Europe even though it was a very important invention used in many commercial applications.
Europe is focused on niche innovations with little product scalability and low financial profitability. Exceptions do exist (IKEA, ASML, Airbus, Nono Nordisk) but those are very little compared to what the US cooked.
>Also, Northvolt had leadership with hubris. All talk and no batteries.
Isn't this the SV scale-up modus operandi? Talk the talk for investors to throw money at you hoping you'll eventually become profitable before they wise up. This worked during the zero-interest money days, not so much now.
I think it was more a problem with TTT, Things Take Time.
Put up in a place
where it's easy to see
the cryptic admonishment
T.T.T.
When you feel how depressingly
slowly you climb,
it's well to remember that
Things Take Time.
-- Piet Hein
Build one (small) factory first, make it work.
Instead of "Build Hype. Build five factories. See what happens"
I think owners could have put up with some loss margins for some time just for the fact of having control over production.
But someone needs to build the factory, not just talk about it and waste money.
They were offered government loans, but they did not accept it. The government has also said that direct subsidizes are not on the table since they already gotten enough. Applying more subsidizes will decrease trust people have in the venture and increase the view that falling prices in batteries are from subsidies rather than advances in technology.
According to this (and other) reports, they never got their high volume production yields anywhere near that of their (Chinese, Japanese, Korean) competitors, which made their end products far too expensive. Geopolitics aside, they didn't have any competitive edge, it's difficult to see where they would get it, since both their raw materials and manufacturing equipment were majorly imported from Asia.