We have not had the tools or comprehensive methodologies to find out what is happening when your Ecosystem shows signs of stress or even collapsing. In this Business Case Study of Northvolt AG using the IIBE Lens approach you can achieve this understanding.
Traditional analysis of the health of any Business Ecosystem can miss so much. In our constructing the Ecosystem IIBE Lens we found the Northvolt business case as a really revealing contrast case for the IIBE and how we learned to evolve it from this. We wanted to show what happened when the Ecosystem ignored the multiple signs of collapsing, and ask if these can be recognized as contributing symptoms earlier?
We believe we can provide the answers through the IIBE Lens
This post is an extended Business Case study of Northvolt AB- it provides some valuable lessons on the management of Ecosystems operating in complex, challenging and often volatile conditions rapidly seeking competitive advantage at speed and scale.
This is a 15-minute+ read as it offers an extended case study of the value of the use of the IIBE lens to a fascinating Ecosystem that showcases how to avoid or avert those moments when you can in your Ecosystem design cross thresholds where your operating logic must fundamentally shift and you realize the architecture has no mechanism to execute these shifts.
This case shows how seemingly a “healthy” ecosystem collapsed, what our original IIBE lens could see – in this case retrospectively- and what was missed, and introduces a new dynamic IIBE principle: designed for Ecosystem optionality under volatility.
Last week in a short series I outlined where applying a IIBE lens to four of the most capable industrial companies in the world exploring differences between the Ecosystem positioning of Siemens AG, Schneider Electric, ABB and GE Vernona.
Here I outline a detailed Business Case- Northvolt AG and how the IIBE Lens might have averted the Collapse
Northvolt is a very revealing contrast case for the IIBE, and in many ways it complements the heavy-engineering incumbents in that series of last week. Opening post here: “Looking Through the IIBE Lens: A New Perspective on Ecosystem Strategy.
The Core Problem:
Northvolt designed for one scenario only: explosive EV growth + rapid achievement of manufacturing excellence. No Plan B, C, or D existed.
Firstly lets start with The Paradox: Northvolt AB, Europe’s flagship battery manufacturer, raised $15 billion, secured partnerships with VW, BMW, Volvo, and Goldman Sachs, achieved “unicorn” status, and was celebrated as a climate champion — yet filed for Chapter 11 bankruptcy in November 2024 with only one operational customer (Scania) emerged as a operational anchor while the other commitments struggled to translate into any recognized commercial volume and production running at very low capacity or in phased set-up..
The IIBE Analysis applied retrospectively to test the IIBE Lens: This case study demonstrates why you need to designed Optionality under Volatility into any essential ecosystem design and keep undertaking a constant assessment.
Our initial IIBE Lens would have rated Northvolt as a high-performing ecosystem in 2022-2023. It had not revealed the hidden brittleness that made collapse inevitable once volatility thresholds were crossed.
In 2022, if we had assessed Northvolt using the Integrated Interconnected Business Ecosystem (IIBE) Lens as we originally designed it (V1), you would have scored Northvolt as exemplary:
- Institutions: Strong government backing, European Commission support, clear policy alignment
- Innovation: Cutting-edge sustainable battery technology, vertically integrated value chain
- Boundaries: Well-defined European battery ecosystem with clear strategic positioning
- Entrepreneurship: Visionary leadership (ex-Tesla founder), $15 billion raised, massive ambition
By late 2024, that same company filed for bankruptcy with $5.8 billion in debt, less than 1% of target production capacity, and only one operational customer.
The IIBE framework would have missed something critical. Not because it was wrong, but because it was designed to assess ecosystem formation, not ecosystem resilience under stress. What looked like health was actually brittleness. A key learning is Ecosystems are constantly under stress as they deal in complexity, in partnerships and collaborations looking for making changing market conditions through new offerings.
This would have been the initial typical profile of Northvolt.
IIBE Lens Profile — Northvolt- Using Version 1.0
Ecosystem Type
Mission-Driven Industrial Ecosystem Builder
(Energy Storage • Circular Manufacturing • European Industrial Sovereignty)
Northvolt is not a classic firm that “joins” ecosystems — it was born as one.
IIBE Diagnostic Summary
| IIBE Dimension | Score | Ecosystem Interpretation |
| Purpose Coherence | 9 / 10 | Exceptionally strong and explicit: “Build the world’s greenest battery.” Purpose is operational, not rhetorical, and shared across partners, investors, suppliers, and policymakers. |
| Partner Vitality | 8 / 10 | Deep, reciprocal partnerships (VW, BMW, Scania, Volvo, utilities, governments). Relationships are long-term and co-developmental, not transactional. |
| Value Flow | 8 / 10 | Circular value logic embedded from design stage (recycling, vertical integration, closed-loop materials). Data and learning flow across the ecosystem. |
| Adaptive Capacity | 7 / 10 | High learning velocity, but constrained by scale-up pressures, capital intensity, and execution risk. Adaptation is fast, but fragile under stress. |
| Governance Integrity | 7 / 10 | Mission-led governance works well now, but complexity is increasing with global expansion, joint ventures, and public funding requirements. |
EHI — Ecosystem Health Index: 83 / 100
Northvolt was achieving mission intensity. They looked to be doing a good job of managing their Ecosystem design.
Ecosystem Configuration (IIBE View)
Northvolt operates as a Designed Ecosystem, not a federated one.
| Ecosystem Layer | Role | Maturity |
| Mission Core | Climate-neutral battery value chain | Very high |
| Industrial Partners | Automotive OEMs, energy firms | High |
| Supply Ecosystem | Raw materials, recycling partners | Moderate–High |
| Policy & Finance | EU, national governments, green funds | High |
| Technology & Data | Digital twins, process optimization | Emerging |
Unlike Siemens, ABB, or others evaluated, Northvolt has no legacy silos — but it did face scaling and orchestration pressure as complexity rises.
Key Frictions (IIBE Lens)
| Friction | Description | Ecosystem Signal |
| Scale vs Learning | Rapid factory scale-up risks slowing experimentation | Adaptive loop strain |
| Capital Intensity | Gigafactories lock in design choices early | Reduced flexibility |
| Partner Dependence | OEM commitments shape roadmap | Power asymmetry risk |
| Governance Load | Public funding adds compliance overhead | Governance density increasing |
These are healthy tensions — not legacy rigidity — but they must be actively managed as the ecosystem grows.
Ecosystem Strengths (Why Northvolt Scores High)
🔹 Purpose as Operating System
Northvolt’ s purpose is:
- Clear
- Shared
- Measurable
- Embedded in daily decisions
This creates ecosystem gravity — partners align because the mission reduces coordination cost.
Partnership Ecosystem (Was Very Strong)
Tier 1 Strategic Partners:
| Partner | Commitment Type | Strategic Value |
| Volkswagen | $1.4B investment + 200 GWh offtake agreement | Anchor customer, co-developer |
| BMW | €2B battery supply contract | Major customer, brand validation |
| Volvo Cars | 15 GWh annual supply agreement | Customer + investor |
| Scania | Commercial vehicle battery supply | Customer (only one that materialized) |
| Fluence | Energy storage system partnership | Adjacent market entry |
| Galp | Lithium refining JV in Portugal | Upstream integration |
| ABB | Automation and robotics supply | Technology partner |
| Siemens | Industrial software and digitalization | Technology partner |
Tier 2 Ecosystem:
- Policy/Government: European Commission support, Swedish government incentives, German subsidies
- Financial: Goldman Sachs, pension funds, sovereign wealth
- Technology: Material suppliers, equipment manufacturers
- Talent: Recruited from Tesla, Samsung, LG, Panasonic
Public Perception (2022-2023):
- Hailed as European industrial champion
- Featured in climate policy discussions
- Presented as model for green industrial transformation.
Performance Metrics (Appeared Healthy)
Visible Success Indicators (2022-2023):
| Metric | Achievement | Market Perception |
| Capital Raised | $15B total | ✓ Strong investor confidence |
| Partnership Volume | 10+ major strategic partners | ✓ Ecosystem breadth |
| Order Book | $55B in contracted orders | ✓ Massive demand validation |
| Production Start | Northvolt Ett operational (2021) | ✓ Execution milestone |
| Government Support | EU Battery Alliance member, subsidies secured | ✓ Policy alignment |
| Talent Acquisition | 6,500 employees, industry veterans | ✓ Capability building |
| ESG Positioning | “World’s greenest battery” branding | ✓ Values alignment |
Yet we witnessed a spectacular collapse.
Northvolt crossed three simultaneous volatility thresholds between 2021 and 2023:
Threshold 1: Capital Intensity increased exponentially
From containable ($4-5B, one facility) to exponential ($15-20B, five simultaneous gigafactories). This wasn’t just more of the same—it was a different game requiring different rules.
Threshold 2: Execution Velocity vs. Learning Velocity
Execution complexity overtook learning capacity scaling faster than organizational capability and no time to “institute this learning
Northvolt started building five factories while production yield at the first remained below 10%. They were executing at a 9/10 pace while learning at a 2/10 pace. That’s a 4.5x gap—execution far beyond organizational competence.
Threshold 3: Volatility Absorption
EV demand volatility increased, Asian competitors dropped prices 30-40%, capital became expensive, and policy support fragmented. The ecosystem needed to shift from deployment logic to preservation logic. EV had demand fluctuations, there was subsidy uncertainties and cross-market complexities, restricting component standards- still only forming through regulatory and industry recognition.
None of these transitions occurred. Not because leadership was incompetent, but because the ecosystem architecture had no designed mechanisms to detect these thresholds or execute the required shifts.
Traditional assessments at the time would have continued showing green lights right up until collapse.
At these thresholds, the ecosystem required a shift in operating logic — from ecosystem formation (growth, partnership acquisition, capital deployment) to ecosystem adaptation under uncertainty (optionality preservation, pivot capacity, graceful degradation).
This transition recognizing growing brittleness never occurred.
The Outcome: An ecosystem that looked healthy became structurally brittle and collapsed when volatility exceeded adaptive capacity.
The Lesson: High-performing ecosystems without optionality architecture are fragile ecosystems. This case validates the necessity of in all future IIBE assessments.
Northvolt entered the Death Spiral
The Death Spiral:
- Quality issues → customer cancellations
- Customer cancellations → no revenue
- No revenue → cash burn accelerates.
- Cash burn → investor panic.
- Investor panic → no new capital
- No new capital → bankruptcy inevitable
2024 November: Chapter 11 Bankruptcy Filing
The Numbers:
- Assets: Gigafactories (worth less than construction cost)
- Liabilities: $3-5B debt + operational obligations
- Revenue: Minimal (only Scania)
- Path Forward: Uncertain — restructuring, potential asset sales
From $12B Valuation to Bankruptcy in 18 Months
Why Thresholds Weren’t Defined here (assumption):
Hypothesis 1: Optimism Bias
Leadership believed EV growth would solve all problems (“we just need to scale faster”)
Hypothesis 2: Investor Pressure
$15B raised created pressure to deploy capital and show progress (gigafactory starts = visible milestones)
Hypothesis 3: Ecosystem Momentum
Partnerships with VW, BMW created locked-in trajectory; slowing would signal weakness.
Hypothesis 4: Lack of Framework
No methodology existed to identify when “ecosystem formation” logic should shift to “ecosystem adaptation under volatility” logic.
So, applying your initial v.1 IIBE lens it would have missed something? Yes and No
No — but it revealed something that wasn’t yet made explicit enough.
What the IIBE lens did pick up
The original IIBE profile already flagged:
- Adaptive capacity as emerging but fragile
- Governance integrity as mission-led but informal
- Scale as a future stress multiplier
Those were early warning signals.
However, what the Northvolt case teaches us is this:
“High ecosystem health at time does not guarantee survival across regime shifts unless adaptive options are explicitly designed.”
This is the missing emphasis.
Could Dynamic 6 of O & V Have Predicted Northvolt’s Collapse?
Answer: Yes.
Evidence:
| Optionality & Volatility | Northvolt Score | Risk Level | Prediction |
| Brittleness Ratio | 6.33 | BRITTLE | Collapse likely if volatility rises |
| Learning/Execution | 4.5 | DANGEROUS | Capability gap unbridgeable |
| Graceful Degradation | 0 pathways | BINARY | Success or collapse, no middle |
| Volatility Thresholds | None defined | BLIND | Will miss critical transitions |
| Optionality Architecture | Level 1 (Rigid) | LOCKED | Cannot adapt when needed |
Overall O & V Assessment: STRUCTURALLY BRITTLE — HIGH COLLAPSE RISK
Actual Outcome: BANKRUPTCY
Conclusion: The IIBE Lens using the Optionality & Volatility dynamic would have flagged catastrophic risk 18-24 months before collapse.
We concluded in our v.1 work- What needs sharpening was the IIBE articulation in our research towards higher focus on volatility and changing market conditions.
We need to recognize building Ecosystems are complex, challenging and need to be highly adaptive to changing market conditions, partly driven by the shifts that Ecosystems bring to markets.
Recognizing the Need- We Built a New IIBE Principle
Designed Optionality under Volatility
Definition
Designed Optionality under Volatility is the deliberate architectural capability of an ecosystem to retain, activate, or reconfigure strategic choices as uncertainty increases — without requiring collapse, exit, or emergency intervention.
It treats volatility not as a risk to be absorbed, but as a condition to be engineered for.
Designed optionality starts by naming your biggest underlying assumptions and designing what happens to the ecosystem, if it begins to fail
Reinterpreting Northvolt through a refined IIBE lens
When we re-run Northvolt with this sharper framing:
| Dimension | Original Reading | Revised IIBE Insight |
| Purpose | Very strong | Became brittle without redesign options |
| Partners | Vital | Not co-owners of pivot decisions |
| Value Flow | Circular | Locked into scale-dependent economics |
| Adaptive Capacity | Emerging | Never institutionalized |
| Governance | Trust-led | Not stress-tested for contraction |
Northvolt did not fail because it lacked ecosystem thinking.
It failed because it did not operationalize ecosystem adaptability before scaling irreversibly.
That is a much more subtle — and much more valuable — lesson.
We also gained a further realization.
MVE vs IIBE (and why this matters hugely)
Minimum Viable Ecosystem (MVE)
- Excellent for ecosystem birth
- Hypothesis-driven
- Lean, focused, optimistic by design
Northvolt mastered this phase.
IIBE (Integrated Interconnected Business Ecosystem)
- Required for ecosystem survival under uncertainty.
- Designed for sensing, learning, reconfiguration.
- Explicitly prepares for futures that invalidate the original bet.
Northvolt never crossed this threshold.
This gives you a powerful, almost canonical framing:
MVE gets you started. IIBE keeps you standing when the future shifts.
So, we gained real insight.
Returning to assumptions we listed earlier, perhaps the biggest assumption was that Northvolt’s ecosystem was wired around a single master assumption, this optimism bias: that EV demand growth and subsidized capital would outrun execution risk.
An IIBE-driven design would have forced that assumption to the surface and asked : what if demand is slower, capital more expensive, or policy more fragments- and what minimal survivable ecosystem can do in each of these cases?
Coming back to a comparison.
Original Ecosystem Strengths for Northvolt (using our Baseline Reality IIBE Lens v1)
Northvolt entered the market with rare ecosystem advantages:
| Dimension | Observed Strength |
| Purpose | Singular, compelling, operational (“world’s greenest battery”) |
| Partners | Deep OEM, government, utility, and recycling alliances |
| Value Logic | Circularity designed in from inception |
| Legitimacy | Strategic European asset with policy and financial backing |
| Speed | Rapid learning and execution in early phases |
Result:
Northvolt achieved high early ecosystem coherence and accelerated scale faster than most industrial entrants
Traditional Assessment (D1-D5 Only) Would Have Shown:
| IIBE Dynamic | Northvolt Rating (2022-2023) | Evidence |
| D1: Ecosystem Mapping | HIGH | Strong partner network, clear dependencies |
| D2: Value Flow | MEDIUM-HIGH | Clear value proposition, aligned customer incentives |
| D3: Orchestration | MEDIUM | Governance structures forming, partnership coordination visible |
| D4: Intelligence | MEDIUM | Technology partnerships, R&D capability |
| D5: Strategic Pathway | HIGH | Clear scaling roadmap, capital commitments secured |
Overall Assessment (D1-D5 Only): HEALTHY, HIGH-POTENTIAL ECOSYSTEM
This is why applying the new dynamic of optionality and volatility became essential is — it reveals what performance metrics hide.
What the changing IIBE Lens Reveals (here in Retrospect but not in of our evaluations going forward)
Ecosystem Missing Signals
An IIBE-based, more Ecosystem Health orientated lens would have surfaced early warnings:
| Signal Type | What Happened | What Was Missing |
| Adaptive Capacity | Scale locked in design choices | No adaptive thresholds |
| Partner Vitality | Partners committed capital but not pivot authority | No shared reconfiguration rights |
| Value Flow | Economics dependent on continuous expansion | No downscale pathways |
| Governance Integrity | Founder- and mission-led | No stress-tested adaptive governance |
Insight:
The ecosystem looked healthy, but it was becoming brittle, very rapidly in this case.
Counterfactual: How IIBE Would Have Changed the Trajectory
Designed Optionality (Critical Missing Capability)
Under IIBE, Northvolt would have:
- Designed minimum survivable ecosystem configurations.
- Built modular scale-up and scale-down pathways.
- Defined pivot triggers linked to capital, policy, and demand shifts.
Growth would have been conditional, not irreversible.
Adaptive Governance Before Capital Acceleration
Instead of relying on trust and mission gravity, IIBE would have introduced:
- Distributed decision rights across ecosystem partners
- Adaptive governance nodes with authority to pause, pivot, or reconfigure.
- Explicit “ecosystem reconfiguration protocols”
Governance would have evolved ahead of complexity, not behind it.
Partner Co-Ownership of Adaptation
In the IIBE counterfactual:
- OEMs and public partners become co-orchestrators, not just anchor customers.
- Value-sharing includes risk-sharing for adaptation, not only scale benefits.
- Exit, pause, or redesign options are legitimate ecosystem moves.
Partners would share responsibility for resilience, not just growth.
Building in an Ecosystem Health Diagnostic as a Continuous Stress Sensor
An IIBE-enabled EHD would have tracked:
- Learning velocity vs. scale velocity
- Capital concentration risk.
- Policy fragmentation signals
- Option value erosion
This would have enabled early, deliberate contraction or re-segmentation — not reactive collapse.
Revised IIBE Diagnostic (Counterfactual)
| Dimension | Observed Reality | With IIBE Applied |
| Purpose | Strong but brittle | Strong and adaptive |
| Partner Vitality | Committed but passive | Co-owning adaptation |
| Value Flow | Circular but scale-dependent | Circular and modular |
| Adaptive Capacity | Emergent, informal | Institutionalized |
| Governance Integrity | Trust-based | Adaptive and distributed |
Counterfactual EHI:
83 → Sustained at 78–82 under volatility
(lower peak, far higher survival)
Within applicable Lenses in an extended Ecosystem Exposure and Option Diagnostic it can produced a Brittleness Ratio, a Learning Lag score, a Volatility Threshold Architecture map, Minimum Survivable configurations,, shared pivot rights with key partners and explicit volatility thresholds linked to capital, demand and policy
The Core Lessons — Why This Matters Strategically
Northvolt did not fail because it lacked ecosystem thinking.
It faltered because it never transitioned from ecosystem intent to ecosystem operating design.
This is the exact gap the IIBE closes.
Why Northvolt Strengthened the IIBE Validation
Northvolt becomes a keystone case for our methodology because it shows:
- MVE ≠ IIBE
- Early ecosystem success ≠ long-term ecosystem resilience
- Mission-driven ecosystems still require designed adaptive architecture.
It proves that:
Ecosystem leadership is not about scaling faster — it’s about retaining options longer.
Explains why early ecosystem success can still fail.
- Makes IIBE relevant to capital-intensive, regulated industries.
- Gives boards and executives permission to slow down intelligently.
- Turns volatility into a design parameter.
Implications for IIBE Framework
Dynamics focusing on optionality and volatility are now Mandatory for:
- Capital-Intensive Ecosystems
- Gigafactories, infrastructure, heavy industry
- Where commitment depth is high by nature
- High-Volatility Markets
- Emerging technologies (batteries, hydrogen, quantum)
- Policy-dependent sectors (energy, healthcare)
- Geopolitically exposed industries
- Fast-Scaling Ecosystems
- Venture-backed with pressure for exponential growth
- Where execution velocity can outpace learning
- Long-Payback-Period Investments
- 5–10-year paths to profitability
- Where early commitments lock in trajectories
IIBE Headline for Northvolt (Counterfactual)
“Northvolt shows us that ecosystems must be engineered not only to grow — but to survive when growth becomes the risk.”
For ecosystem builders, the implication is clear:
- Design optionality recognizing volatility will occur from inception, not as an afterthought when you need it. By then, you’ve already spent your room to maneuverer.
- Define thresholds before you cross them. Once crossed without recognition, recovery becomes impossible.
- Balance commitment with adaptive capacity. Never lock in faster than you build the ability to pivot.
- And most importantly: recognize that the architecture needed to build an ecosystem is fundamentally different from the architecture needed to sustain one under stress.
Focusing on optionality and volatility makes that distinction visible and actionable and totally critical. That’s its value—and why it’s an essential part of the IIBE Lens today.
The ability to go on and test the IIBE Lens has built a level of robustness that can be applied to any sector-by-sector from the Energy Transition, Advanced Manufacturing, Infrastructure, mobility, Healthcare & Life Sciences, Financial Services, Agriculture & Food Systems, Platform Businesses, Defense or National Security and finally even Climate Adaptation.
Bob Gravestijn will next in a post, provide an excellent Business Case narrative for Northvolt to explore his post embodies the learning through applying the IIBE Lens to feel its true force inside this real, high profile, emotionally resonating failure.
His framing creates the real intrigue and signals that stands apart from any rehash of a bankruptcy narrative you might have read.
Recognizing the power of Applying a IIBE Lens approach
“The Northvolt assessment took approximately two x four hours of structured analysis using the different levels of diagnostic after initial understanding and setting up, excluding early runs to assess its ability to deliver.
Applied prospectively rather than retrospectively, those same hours in Q1 2023 would have surfaced an 18-month intervention window worth $8-10 billion in preserved optionality as an assessment for Northvolt.
We now apply optionality and volatility as a standard component of the IIBE Lens engagement. If your organization is currently crossing a capital intensity threshold, scaling faster than your learning curve, or building on policy-dependent assumptions — this diagnostic is the most important four hours you can invest before those options close. The conversation starts here.”
The IIBE Lens absolutely opens the conversation and provides the ability to design an Ecosystem that shows actionable insights rather than generic ecosystem advise. If you sense a growing problem, wondering how to change it and what it can cost in not recognizing the symptom and acting on them decisively then prepare for a bumpy ride in the future.
“These Investments hours can highlight growing problems can have, provide indicators of what might be changing when the IIBE lens provides a diagnostic, and does provide that essential early understanding of what it can “future constrain” you in not initiating this Ecosystem IIBE lens to understand and act upon early enough.”