Swedish EV battery maker Northvolt files for bankruptcy

Northvolt, the Swedish battery cell maker for electric vehicles, said on Wednesday it had filed for bankruptcy in Sweden, ending Europe’s best hope of developing a rival to major Asian electric vehicle (EV) battery players.

One of the country’s largest battery cell makers, Northvolt sought US Chapter 11 bankruptcy protection last November as its cash pile dwindled, in a bid to secure funds to fix persistent problems in boosting output at its flagship plant in northern Sweden.

“The company was unable to secure the necessary financial conditions to continue in its current form,” the group, which has more than 5,000 employees, said in a statement.

At the end of January, its debt stood at more than $8bn across the nine Northvolt entities in the Chapter 11 process, documents have shown.

A court-appointed trustee will now oversee the bankruptcy process, which will include the sale of its assets and settling its outstanding obligations as far as possible.

The bankruptcy is one of the biggest in Swedish corporate history and the most high-profile one since that of now-defunct carmaker Saab Automobile more than a decade ago.

Operations outside Sweden

Northvolt’s operations in North America and Germany were not filing for bankruptcy in their jurisdictions and any decision regarding those units would be made by the trustee in consultation with lenders, the company said.

The company’s Polish entity was also not included in the bankruptcy filing, an internal document showed.

Europe’s vehicle sector had hoped Northvolt would reduce Western carmakers’ reliance on Chinese rivals such as battery maker CATL, and EV and battery maker BYD.

The company has received more than $10bn in equity, debt and public financing since its 2016 inception, counting Volkswagen with a 21% stake, and Goldman Sachs, holding 19%, as its biggest owners.

Early last year, Northvolt clinched a $5bn green loan deal, intended to pay for a large plant expansion, but funding was later cancelled as its problems mounted.

German carmaker BMW cancelled a $2bn order in June 2024 as the battery maker failed to deliver on a long-term supply contract signed in 2020 for battery cells.

Former Northvolt CEO Peter Carlsson, who stepped down shortly after the Chapter 11 filing in November, said at the time that the company needed up to $1.2bn to restore its business.

In recent months, several owners have written down their stakes to zero while long-time partner Scania said this week it had lined up a new supply of battery cells in addition to the truckmaker’s deal with Northvolt.

Reuters