Northvolt AB reported a widening loss for last year after the company struggled to ramp up production of battery cells for electric cars at its factory in Sweden.

The manufacturer’s operating loss more than tripled to US$1.03 billion last year, Northvolt said on Tuesday. Chief executive officer Peter Carlsson said the company had dealt with “multiple challenges and setbacks” while seeking to scale up output at its Ett factory. 

“The overall progression was towards more stable production,” Carlsson said in the company’s annual report. “While challenges remain, I expect the positive returns of our learnings will be magnified as we move towards launching additional production blocks at Northvolt Ett, and new factories in the future.”

Revenue slightly advanced to US$128 million last year, up from US$107 million.

Europe’s most advanced homegrown battery maker is struggling to transition to full-scale production with the region behind on long-standing Asian battery rivals. Customers like Volkswagen AG’s Scania have complained of delivery delays, while BMW AG has backed out of a €2 billion battery order because of quality concerns, dealing a blow to the region’s efforts to establish an independent electriv vehicle (EV) supply chain. 

More broadly, Northvolt is facing challenges from an influx of cheaper batteries from China, where manufacturers like BYD Co have advanced so-called lithium-iron-phosphate batteries. Demand for EVs has also flagged, prompting carmakers like Mercedes-Benz Group AG and VW’s Audi brand to adjust plans. 

Still, Northvolt on Tuesday said it’s targeting 25% market share in Europe by the end of the decade, equivalent to about 150 gigawatt production capacity. Aside from its plant in northern Sweden, the company is developing a factory with Volvo Car AB near Gothenburg and a site in Heide, Germany. It also committed to establishing a cell plant in Montreal, Canada. 

Last month, Bloomberg reported that plans for an initial public offering had been pushed to next year because of a challenging market for listings and the operational difficulties in scaling up production. The company is also losing its chairman, veteran industry leader Jim Hageman Snabe, at a critical time. 

Snabe, who also chairs Siemens AG, won’t return after six months of sick leave. The Dane had been picked for the position in 2022, in an effort to build a more independent board with an industrial track record ahead of a potential IPO. 

  - Bloomberg