Northvolt files for bankruptcy in Sweden

The Board of Directors of Northvolt AB announced Wednesday that it has filed for bankruptcy in Sweden after failing to secure a viable financial and operational future for the company, marking the end of the road for a pioneer in battery cell manufacturing in Europe.

The business filed for Chapter 11 bankruptcy protection in the United States in November 2024 and embarked on a debt restructuring process and search for new sources of funding. Only a day after Northvolt voluntarily filed for Chapter 11 reorganization, Peter Carlsson, who led the company since he co-founded in 2016, resigned as CEO. The company was Europe’s best funded start-up, having raised around $15 billion since founded in 2016, but was down to its last $30 million, according to the filing.

On Wednesday, the company said that it was unable to secure the necessary financial conditions to continue in its current form. “The Board therefore determined that this is the only available solution while the company pursues all realistic options to obtain financing to continue operating during the Swedish bankruptcy process,” Northvolt said in a statement.

The company has also reported “significant traction with potential partners and interest from investors”. However, with limited time and financial resources available, it was unable to conclude the necessary agreements to secure its future.

“Today’s announcement regarding European battery poster child, Northvolt, filing for bankruptcy, has delivered a real blow for regional ambitions to challenge China and Asia’s sector dominance,” said Evan Hartley, research manager at Benchmark Mineral Intelligence.

Northvolt, which secured the backing of big investors such as Volkswagen, BlackRock, and Goldman Sachs, has faced a series of setbacks, such as big order cancellations and difficulties in scaling production. Compounding challenges in the global battery supply chain have further deteriorated its position.

“Launched with initial hopes for 170 GWh of capacity in Europe, three plants and full integration of cathode and precursor production, their plans had hit multiple roadblocks in the past few years. A wider market of lithium iron phosphate (LFP) demand growth, plummeting cell prices, and the general difficulty in producing cells were the final nails in the coffin for the Northvolt project,” Hartley said.

Following the filing, a Swedish court-appointed trustee will now oversee the process, including the sale of the business and its assets and settlement of outstanding obligations. The process will be conducted in accordance with Swedish insolvency law, with a focus on ensuring an orderly transition for employees, partners, and creditors. Northvolt has nominated Mikael Kubu as Trustee.

The entities Northvolt AB, Northvolt Ett AB, Northvolt Labs AB, Northvolt Revolt AB and Northvolt Systems AB filed with the Swedish court. Northvolt Germany and Northvolt North America are not filing for bankruptcy in their respective jurisdictions. As wholly owned subsidiaries of Northvolt AB, any decisions regarding these entities will be made by the court-appointed trustee of Northvolt AB in consultation with the Group’s lenders at the appropriate time, the company said.

“This is an incredibly difficult day for everyone at Northvolt,” said Tom Johnstone, interim chairman of Northvolt’s Board of Directors. “The outcome is especially hard considering not only the level of engagement and interest we held with potential partners and investors in recent months, but also the clear improvement and upwards trajectory that we have been seeing in Northvolt’s production in Skellefteå, where cell output from serial production lines has doubled and we have secured a 50% improvement in production yield since September.”

In December 2021, Northvolt became the first manufacturer to produce battery cells fully designed, developed and assembled by a homegrown European battery company. Those first cells rolled off its manufacturing lines at Northvolt Ett in Skellefteå.

“For me personally, it remains key for Europe to have a homegrown battery industry, but it is a marathon to build such an industry. It needs patience and long-term commitment from all stakeholders,” said.

A multitude of companies have already positioned themselves to supply the European electric car and energy storage industries with battery cells produced in Europe.

“As it stands, Northvolt only accounts for 7% of planned capacity in Europe, and 13% of planned Tier 1 capacity. Meanwhile, market share for global goliaths like CATL, and LGES, continues to soar,” Benchmark’s Hartley says.