Northvolt, a Swedish electric vehicle battery manufacturer, has filed for bankruptcy, dealing a significant blow to Europe’s ambitions in the EV market. The company, which has been seen as a cornerstone of European attempts to catch up with China and the United States in battery cell production, cited its liquidity situation as “dire.”
Despite the bankruptcy, Northvolt intends to continue its operations during a restructuring phase expected to be completed by the first quarter of 2025. Scania, a partner in the automotive industry, has stepped in with a $100 million loan to aid Northvolt through the bankruptcy process.
The company’s primary manufacturing facility is located in Skelleftea, Sweden. The plant has been a critical part of Europe’s drive to localize battery production to support the growing EV industry and reduce reliance on external markets. However, Northvolt has faced stiff competition, which has exacerbated its financial difficulties.
Hours after the company sought bankruptcy protection in the US, Northvolt announced the resignation of its CEO, Peter Carlsson, who co-founded the company in 2016.
Northvolt’s restructuring amid financial woes
The search for a new chief executive is underway.
In its US filings, the battery maker said it had debts of $5.84 billion and just $30 million in available cash. Carlsson expressed confidence that the company would be able to capitalize further and that those financing the current process might also be part of the recapitalization process. Northvolt said its operations would continue as normal during the reorganization.
In September, the company announced it was cutting 1,600 jobs—a quarter of its staff—and suspending the expansion of its site due to strained finances and a slowdown in demand. Despite the strategic importance of electric batteries for the green transition, the Swedish government has insisted it will not come to the group’s financial rescue. Swedish Energy, Business and Industry Minister Ebba Busch expressed hope that Chapter 11 proceedings would provide an opportunity to find a long-term solution for the company, while reaffirming the government’s support for a viable battery industry and the green transition.
