Northvolt Files for Bankruptcy Amid Europe’s EV Challenges

4 days ago Editor

Northvolt files for Chapter 11 bankruptcy, securing $245M in financing to restructure operations. Europe’s leading EV battery maker faces financial and production challenges amid stiff competition from China.

Northvolt, a prominent Swedish electric vehicle (EV) battery maker, has filed for Chapter 11 bankruptcy protection in the United States, signaling a major setback for Europe’s ambitions to compete in the global EV battery market.

The company reported only $30 million in available cash—sufficient to support operations for about a week—and faces $5.8 billion in debts. To manage its financial crisis, Northvolt has secured $100 million as part of a $245 million financing package and expects to complete restructuring by the first quarter of 2025.

Northvolt, employing 6,600 staff across seven countries, has struggled with production issues, the loss of a major customer, and challenges in securing adequate funding. This decline undermines its role as a key player in reducing Western automakers’ reliance on Chinese battery manufacturers, such as CATL and BYD.

The restructuring plan includes evaluating investments from strategic and financial backers. Scania, a shareholder and Northvolt’s largest customer, has pledged $100 million to support the production of battery cells in Skellefteå, Sweden. Volkswagen, holding a 21% stake, remains in close communication with Northvolt but has not disclosed the potential impact on its own operations.

Despite Europe’s push to establish a competitive battery industry, EV demand growth has fallen short of expectations, while Chinese dominance in battery-cell production continues to pose stiff competition.

Swedish Deputy Prime Minister Ebba Busch reiterated the government’s commitment to supporting the EV battery sector, expressing hope for Northvolt’s turnaround.