Northvolt, a Swedish battery startup for electric vehicles, has filed for bankruptcy in Sweden, symbolizing the end of a company once viewed as Europe’s best chance of challenging the dominant Asian battery industry.
In a statement, the company announced its inability to “secure the necessary financial conditions to continue in its current form” in Sweden.
Following the bankruptcy filing, a court-appointed trustee will oversee the sale of Northvolt’s business and assets and the settlement of its outstanding debts.
This development leaves the company’s 5,000 employees facing an uncertain future, and Northvolt has pledged to work closely with authorities and trade unions to support and inform workers.
The Swedish bankruptcy filing follows a series of crises at the company, including a filing for Chapter 11 bankruptcy protection in the US in November and the departure of its CEO, Peter Carlsson. Carlsson had previously stated that Northvolt needed between $1bn (£800m) and $1.2bn to restore its business.
Since its founding in 2016, Northvolt, whose slogan was “make oil history”, received more than $10bn in equity, debt, and public financing. It boasted carmaker Volkswagen and investment bank Goldman Sachs as its biggest owners.
Tom Johnstone, Northvolt’s interim chair, expressed his disappointment, emphasizing the company’s aim to drive real change in the battery, electric vehicle, and wider European industry, attempting to accelerate the transition to a greener and more sustainable future.
Northvolt was seen as a key player in Europe’s efforts to establish an electric vehicle battery industry. The company faced difficulties in getting its factory in northern Sweden, intended to produce hundreds of thousands of EV batteries annually using green energy, up and running smoothly. It had also suspended the expansion of Europe’s first homegrown battery gigafactory last year.
The filing for bankruptcy in Sweden came after exhausting all available options to secure a viable financial and operational future for the company, as stated by Northvolt on the day of the filing.
Northvolt attributed its financial situation to a series of compounding challenges, including rising capital costs, geopolitical instability, supply chain disruptions, shifts in market demand, and significant internal challenges during the scaling up of battery production in a highly complex industry.
Northvolt had previously sought to cut costs and announced 1,600 job cuts last year, intending to complete a business restructuring by the end of March in an effort to save the company.
